Kenya Power yesterday dismantled an illegal power selling racket deep inside a Nairobi slum, exposing how a Sh300 million World Bank-backed slum electrification project was taken over by rogue businessmen.
In 2016, as part of Kenya’s electricity expansion project, the World Bank’s Global Partnership Output-Based Aid (GPOBA) partnered with Kenya Power to roll out the slum electrification programme aimed at subsidising the cost of electricity to low-income earners and ending illegal connections.
At one of the sites, 200 KVA ground-mounted transformer had been enclosed in a small stonewalled building from where illegal connections originated. The transformer, which Kenya Power impounded, was next to a six-storey flat that got its supply from it. The rest was supplied to dozens of iron sheet-walled houses and a myriad of businesses. The disconnection of the transformer left dozens of residents without power. The power supply is known as “sambaza” and residents said they paid between Sh200 and Sh700 per month to people they described as “agents.”
The project faced initial implementation challenges. After the project commenced, the average cost of each connection increased to around $900 due to the inflation of input costs. In order to adjust to this increase, GPOBA raised its subsidy from $75 to $125 per connection; IDA and KPLC also increased their subsidies to $250 and $510 respectively. The connection target was revised from 66,000 households to 40,000. The disbursement of subsidies was amended from the original two-tranche schedule to a one-time payment triggered by the verification of working connections with pre-paid meters. Another challenge was that slum residents in certain areas were reluctant to switch to legal connections due to issues of trust, payment barriers, and fear of reprisals from local cartels.
To address this issue, KPLC prepared an implementation acceleration plan, a two-track approach differentiating between those slums with rampant illegal connections and strong cartel presence, and informal settlements designated under the World Bank’s Kenya Informal Settlement Improvement Project. In the informal settlements, KPLC prepared for infrastructure improvements; in the slums where residents were reluctant to convert to legal connections, KPLC used a community supportive approach. Their outreach involved strengthening communication with residents through collaboration with youth groups, civil society organizations, and social scientists, and preparation of educational materials and contact points, such as kiosks.
It took more than three years for KPLC (and the World Bank) to act against the said slum cartels, despite the Bank’s own report from 2016 highlighting this as a “challenge” to project implementation.
I couldn’t easily find any World Bank project reviews in the intervening years. If anyone has pointers let me know.
Akinwumi Adesina, who took over as president of Africa’s lead development lender in September, has said that his flagship project aims to raise $55bn of investment to close the energy deficit in the next decade.
He says the bank will take a leadership role, coordinating with existing multinational initiatives and pushing member states to move faster to privatise and liberalise their energy sectors.
Still on my ongoing project on commodities in Africa, I came across an interesting piece on prospecting for oil in East Africa in which an industry expert had this to say:
The success rate in this region is outstanding. To provide some context, oil and gas exploration typically has a success rate just 10-20%. That’s terrible when you think about. It can cost $50 million to sink an offshore well, and the chance of making a financial return could be as low as one in ten.
But East Coast African energy exploration stands out from the crowd because in all but a few cases they hit oil or gas. To be exact — the success rate has been 87%. A strike rate of close to 9 out of 10 is almost unheard of.
Kenya, South Sudan and Uganda have commercially viable oil reserves. Tanzania has gas and, together with Kenya, has stepped up offshore prospecting in the Indian ocean.
And it is not just foreign MNCs that are in on the game. Locals, in collaboration with foreign investors, are also getting a piece of the energy bonanza in East Africa. Business Daily, a Kenyan paper, recently profiled one George Kariithi, a businessman who started off as a marketing executive and has since built multiple companies in the wider region. His latest investment is in Kenya’s emerging coal sector.
Just as I thought that my stay in Botswana was going to be such a nice ride, I was rudely reminded of where I was by an unexpected power cut. Yes, I was trying to cook dinner while watching some show on the travel channel when the lights went out. With no torch (flashlight, as some call it) or candles I was forced to cook with my ipod, phone and camera as the only sources of light available. Luckily the lights came just as I started having my dinner. It was not a pleasant experience though.
After talking to people in the know I was told that this is a regular thing that happens to select neighborhoods between seven and nine. I was also told that Botswana, lacking any powerplants, buys its power from the neighboring states.
But I just can’t stop wondering why the government hasn’t managed to build enough power generation capacity to satisfy its less than 2 million people – and with all the diamond dollars. Just how hard can it be?