An impact evaluation conducted by IDEV informed a power sector roundtable event, held in Nairobi, Kenya, on 4 April 2023. In 2022, IDEV published an evaluation of Phase I of the Kenya Last Mile Connectivity Project examining whether it has made a measurable difference in the lives of people, and whether the outcomes are sustainable for the utility company and the public it serves. Given that the full program for large-scale roll-out of last mile connections in rural and peri-urban areas of Kenya is estimated to cost USD 2.75 billion, IDEV’s evidence of what has worked and what could be improved as the program moves forward, is of primary interest to stakeholders invited to attend the event.
IDEV, in collaboration with the African Development Bank (AfDB) East Africa Regional Office in Nairobi, Kenya, organized the power sector roundtable to provide a forum for discussion among sector experts around the findings, the practical lessons and the recommendations drawn from the evaluation and other studies. The theme was “Beyond Umeme for All”, Umeme being the Swahili word for electricity.
In his keynote speech presented on his behalf by Wycliffe Ogallo, the Secretary Administration, Alex Wachira, Principal Secretary at the Ministry of Energy in Kenya, set the scene by reminding participants that the flagship last-mile program was launched by the Government of Kenya to connect low-income groups in rural and peri-urban areas to the national grid. The target is to connect 17 million households by 2030, almost double the number of 9 million current connections. Through African Development Fund (ADF) funding, phase 1 of the Kenya Last Mile Connectivity Project was able to connect about 530,000 households across 47 counties.
A key area of the roundtable discussion that followed was what should be done to sustain rural electrification, bearing in mind issues of reliability, affordability and quality of electricity, as well as increasing the productive use of electricity in rural areas.
Eustace Uzor, IDEV evaluator in charge of leading the impact evaluation of the Last Mile Connectivity Project, presented the main findings of the evaluation. He reported that although phase 1 of the project had increased access to and use of a reliable source of electricity for households, the sustainability of project benefits was found highly unlikely. This was mainly due to the high cost of network operations and maintenance for the utility, Kenya Power (KPLC), versus the low revenue generation from last-mile connections. Mr. Uzor explained that the financial sustainability of the electric utility company is a critical success factor for the quality and reliability of electricity provided to eligible households; and that a high cost of electricity relative to household incomes undermines access and the productive use of electricity.
IDEV evaluation findings were complemented by a presentation made by Susanna Berkouwer of the University of Pennsylvania. Ms. Berkouwer explained that Kenya Power had used both bundled and unbundled contracts for implementation of phase 1. Faster construction of the bundled procurement method used for sites financed by the AfDB had resulted in shorter break-even times and therefore profitability for Kenya Power company, but the trade-off was impaired sustainability, concluded Ms. Berkouwer.
Weighing the benefits of both procurement methods, participants in the roundtable debated the merits of up-front contracting to reduce construction delays and ex-post audits as a means of improving the quality of construction and outcomes for households at a relatively low cost.
In terms of customer service, participants discussed the specificities of rural connections in the Kenyan market and providing customers with options such as fixed versus variable tariffs, or postpaid versus prepaid. Furthermore, the participants underscored that a future last mile connectivity program should take into consideration the fact that access to a service (such as electricity) alone cannot lead to behavior change and transformation. This calls for the integration of complementary measures such as sensitization campaigns, business trainings, skills building and strengthening income-generating activities during project design and implementation. It also calls for a practical multisectoral approach to ensure that the end-users benefit from the investments in the energy sector.
The roundtable participants also discussed how the lessons from phase I of the Last Mile Connectivity Project can be applied in future interventions.
Andrew Muguwa, Principal Operations Officer, AfDB, presented a project for the next phase of the last-mile connectivity program. He explained that evaluation lessons and recommendations had fed into the new project design, as would the outcomes of the roundtable discussion. The project, to be submitted to the AfDB Board of Directors for funding in Q3 2023, would for example include institutional support, income generating activities and capacity building to promote sustainable development of the electricity supply industry, including a study of least-cost generation. It also included measures to maintain profitability for the utility through efforts to reduce the high network losses prevailing in Kenya’s electricity sub-sector.
Panelists at the event, moderated by Engineer David Mwangi, included senior officials from the State Department for Economic Planning, management from the Kenya Electricity Transmission Company, the Electricity Sector Association of Kenya, the Rural Electrification and Renewable Energy Corporation and Kenya Power, as well as energy sector experts from the private sector, civil society, the African Development Bank, the European Investment Bank and Agence Française de Développement.
After fruitful discussions among the 50+ invited participants, Mr. Alemayehu Wubeshet-Zegeye, East Africa Regional Sector Manager, Power System Development, African Development Bank made his closing remarks, thanking IDEV and the sector experts for their insights into how last-mile connectivity projects could be more effective in Kenya and beyond. The event is reported on in a news story by AfDB East Africa Regional Office.
All the resources from the event are available here
