Constitution of Kenya, 2010: Opportunities in Implementation in the Power Sector

1. The Institution of Engineers of Kenya Conference, 9th to 10th May 2012 Constitution of Kenya, 2010: Opportunities in Implementation in the Power Sector Presented by; Eng. Joseph Njoroge, MBS, Managing Director & CEO, Kenya Power

2. CONTENTS • Reference to Energy in the Constitution of Kenya, 2010 • Existing Power Sector Structure • Kenya Power’s Business Alignments to County Governments • Opportunities • Challenges • Conclusions

3. Constitution of Kenya, 2010: Reference to Energy & Electricity 3

4. Reference to Energy in Constitution of Kenya, 2010 • Fourth Schedule, Part 1, clause 31: National Government does energy policy including electricity and gas reticulation and energy regulation • Fourth Schedule, Part 2, clause 8(e): County Governments do County Planning and development including electricity and gas reticulation and energy regulation • >>> Electricity is both a National and County resource

5. Energy, Constitution of Kenya 2010 • Article 6 (3) – Requires national state organs (Kenya Power included) to ensure reasonable access to their services in all parts of the Republic as appropriate having regard to the nature of the service • Article 46 – persons’ right of access to services offered by a public and private persons

6. Energy, Constitution of Kenya 2010 • Article 201 (2) – Limits use of Equalization fund (a National Govt facility) to provide basis services including Electricity to the marginalised • Article 62 – Public Land –Laws emanating from this definition will affect electricity generation, transmission and distribution

7. Energy, Constitution of Kenya 2010 • Articles 69, 70 & 71 – obligations in respect of environment, enforcement of environmental rights and agreements relating to natural resources

8. GDC –steam resource development ERC IPPs KenGen Imports Ministry of Energy KETRACO –Transmission KPLC – Transmission/Distribution/Supply REA Energy Tribunal Customers Existing Power Sector Structure Off-grid Generation KPLC’s business alignment with County Govts KPLC’s business alignment with County Govts

9. Efforts to Increase Electricity Access Institutions’ activities in the Scale up Exercise: • Ministry of Energy • Facilitating the Kenya Electricity Expansion Project (KEEP) being implemented by MoE, Kenya Power, KenGen, REA, Ketraco, GDC & ERC • Kenya Power • Maximization projects in areas around the extended grid network to increase access • Slum areas electrification • Increase capacity, efficiency and quality of supply • Partial funding of projects under ESRP • Operation of generation and supply of electricity in off-grid locations

10. Efforts to Increase Electricity Access Institutions’ activities in the Scale up Exercise: • Rural Electrification Authority • Extending the MV grid to social amenities in the rural areas • Investment in off-grid generation • KETRACO • Provides the transmission network to connect generation and distribution and between major load centres. REA and Kenya Power extends downstream

11. Kenya Power’s Business alignment with County Govts • Transmit and distribute Electricity in Kenya • Has established 61 Branch centres to bring services to the people • All 47 counties have Branch Centres already set up

12. Kenya Power’s Business alignment with County Govts.

13. Opportunities & Challenges 13

14. Opportunities • Expanded role of the National Energy Regulatory Commission to policy development to guide Counties in developing Electricity services • Counties can undertake power generation projects to meet their electricity needs • Increased demand of electricity at 10% per annum due to: • County Government – County Offices, urban centres, Infrastructure development. • Resulting increased access • Infrastructure development in Vision 2030

15. Opportunities • Vision 2030 envisages major infrastructural development to facilitate economic growth in the Medium Term Programs and railway automation. Kenya Power’s contribution is: • Increasing population access to electricity from the current 29% to 40% by 2020 • Planning and implementation of distribution reinforcement and upgrade projects • Procurement of adequate power generation capacity from diverse sources; and maintaining a minimum reserve margin of 15% (and preferably 30%) • Promotion of green energy investments by undertaking the procurement process • Improving power supply quality and reliability

16. Opportunities • Petroleum deposits discovery in Turkana could usher in a new frontier in Energy provision should the deposits be confirmed to be commercially viable. • Increased necessity to expand the transmission and distribution systems and continued maintenance to ensure quality of supply

17. Challenges • Capacity development in each County to guide decisions related with Energy & Electricity • Different levels of endowment to natural resources related to electricity – need for policy framework for the same • Commitment towards energy efficiency & environmental issues

18. Challenges • Capital outlay for electricity projects – The sector is capital intensive in nature • National Government’s role in provision of Investment guarantees for development of generation plants • Clear mandates of Sector players to ensure efficiency in resource utilization

19. Conclusions • Constitution of Kenya 2010 saw a new dawn for the Country and created enormous opportunities to achieve the gains envisioned in Vision 2030 • Demand for electricity in Kenya has been growing steadily over the last 5 years with it rising by 9% in the year 2010/11. A medium term growth of between 10 & 12% is expected. • Access and customer service has been the key focus for Kenya Power in delivering the gains made by the Constitution • The challenges are easily overcome by consultative planning, clear mandates of every sector player, a robust National Regulatory Authority and National Government involvement.

20. Thank You 20