Ratio Magazine :: The Inside Track to East Africa’s Economies - Kenya: Power Rationing

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Kenya: Power Rationing - Back to the Future

Thursday, 06 August 2009

Forget about the grand plans and visions of economic development – KPLC’s ‘power management strategy’ will shut nearly everyone off for two entire days a week and shows that Kenya’s government has missed the boat. By Andrea Bohnstedt.

Kenya’s president Mwai Kibaki is never the most invigorating speaker, but when he opened the AGOA Forum in Nairobi on 5 August 2009, his underwhelming speech on boosting exports to the US alongside some unspecific requests for ‘capacity building’ impressed few. And it was rendered meaningless almost immediately by the announcement of Kenya Power and Lighting (KPLC) who finally, and officially, confirmed the beginning of a power rationing schedule: Kenya residents can look forward to two full days of power cuts per week in the foreseeable future. The power rationing has been introduced after insufficient rainfalls severely reduced water levels in Kenya’s dams, affecting hydroelectricity generation on which the country depends for around two thirds of its power.

Presumably, in order to boost exports under the US Africa Growth and Opportunity Act (AGOA), goods would actually have to be produced – more often than not with the use of electricity. There is Vision 2030, there are all the opportunities from the new fibreoptic cable connectivity, there are the government’s urgent pleas to grab hold of the opportunities that AGOA presents, there are export markets in the rapidly growing regional economy – but no electricity.

Stuck

In principle, Kenya’s situation is not unusual. In sub-Saharan Africa, power shortages have long become a structural feature, argued Vishal Agarwal, the Head of Infrastructure Finance at PriceWaterhouseCooper (PWC), at the recent launch of PWC’s Global Utilities Survey 2009, ‘A World Beyond Recession’. And Kenya, he pointed out, has been living on costly emergency power supplies for the past three years – one of the reasons why electricity bills have been so consistently high.

It is no longer just the fact that emergency power is costly –it is also no longer sufficient. This has turned into a major headache not just for the manufacturing sector. Power supplies to Nairobi’s Central Business District (CBD) will, say KPLC, be maintained, but this still leaves countless small enterprises and all other productive members of the private sector outside the CBD stranded for two out of five or six working days.

Global factors are only partly to blame: Based on feedback from interviews with more than 70 CEOs around the globe in the energy and water sector, PWC’s Global Utilities survey 2009 concluded that the global financial crisis may temporarily restrict the availability of capital for infrastructure investments that typically require large sums and a long-term commitment. Ultimately, however, the time frame for investments in this area is much longer than the coming 12 months that are dominated by the discussion of the financial crisis, and as the recent East African Community (EAC) investment conference showed, investor interest in infrastructure is still sound (see EAC Investment Conference: Feedback on Infrastructure).

In Kenya, it is government capacity – without even touching on corruption and governance issues – that is the key obstacle: Any new sources of power, especially in areas such as geothermal energy, require a long-term commitment, and investors are unlikely to consider business in Kenya unless the government is involved in some way. Overall political inertia in Kenya’s Grand Coalition government does not help, and the country’s institutions also simply lack capacities and skills to develop and manage such large-scale projects quickly – there are hardly any people in government who have the technical ability to conceive, plan, negotiate and manage such complex projects. This also affects private investors who, as e.g. independent power producers, will necessarily play a much stronger role in the sector’s reform programme. But even when something eventually happens, there are additional obstacles: Turkana Wind got a lot of international press coverage as the largest wind project in Kenya – but for whatever output Turkana Wind will generate, there is currently no transmission line to the national grid.

Government, Agarwal says, can probably make the single-biggest difference in power generation – and in Kenya, execution is clearly a problem: the problem of power shortages is by no means new, and many projects have been talked about for a long time without anything happening.

Perspectives

If anything, the power rationing shows that Kenya’s authorities have truly dropped the ball: Rainfall is hardly controllable, but shortfalls can and need to be anticipated by a government with a minimum of foresight. Droughts occur regularly, so it is disingenuous to then wonder loudly about failed agriculture, famine – and hydroelectricity shortages. It was well known that Kenya’s power generation was effectively at the same level as demand, and that the recurrence of droughts would suggest the need to diversify energy sources. If a government does not have the capacity to anticipate and manage this situation, then the grand plans and visions become meaningless.

Raila Odinga may have tried to engage the private sector in the Prime Minister’s Round Table, but the power rationing shows much the current government is busy with their own squabbles at the expense of governing. Or, as summarised on Twitter: ‘No water, no power, no food, no forest, no security. Thank you, Government of Kenya!’

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Power Rationing
written by Jedida, August 07, 2009

I have spent the better part of my morning at Java along with other self-employed or work from home Kenyans who had no power supply today. I did not get to use the internet let alone my laptop as all (three) power outlets were in use and there were 6 people waiting for those seated to clear out. I ended up having a coffee and chatting for a couple of hours with a friend who was also there for the same reason (She had already been to three cafes that morning and this was her fourth, by cab).
I think this vision 2030 will definitely bypass a majority of Kenyans, as a higher percentage are either self employed,working from home or looking for employment (mostly online).Who can afford this expenditure for coffee, cabs and time spent, with hardly any worthwhile returns?

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