NAIROBI, Kenya, Nov 26- The Ministry of Energy has revealed it requires $500 million (Sh40.2 billion) to upgrade the country’s aging power transmission system.
The funds are required to expand the network, as only 29 percent of the Kenyan population is connected to electricity.
Ministry of Energy Permanent Secretary Patrick Nyoike said on Friday that the country had been forced to endure regular power outages owing to the rundown transmission system and insufficient power generation.
“Right now, on average, we experience 600 blackouts a month owing to the poor transmission network,” Mr Nyoike said.
Out of the said amount, the PS said the government had already mobilised Sh16 billion for the upgrade exercise that is aimed at improving the country’s power quality. The ministry has already advanced the Kenya Power and Lighting Company (KPLC) the funds to carry out the exercise.
The business community has long blamed power outages for rising product prices which they argue is curbing economic growth.
Mr Nyoike said the money is to be raised by 2014 to complete the projects. The Sh40.2 billion investment is expected to boost the per capita consumption of power from 144 kilowatt-hours to an estimated 300 kilowatt-hours.
Mr Nyoike was speaking during the launch of KPLC’s Rights Issue, where the power distribution company is seeking to raise Sh9.1 billion for a system upgrade programme and expansion.
The PS did not however give details on how they intend to raise the balance.
KPLC will be floating 488.6 million new ordinary shares at Sh19.50 with the offer closing on December 23. The offer price marks a 30 percent discount over a six-month period of the shares trading levels.
KPLC Managing Director Eng Joseph Njoroge exuded confidence that the offer would be received well in the market.
“The offer is not limited to the current shareholders. The government rights will be available to the public who wish to gain ownership of the company,” Eng Njoroge said.
Shareholders will be entitled to purchase 20 new shares for every 51 shares held. The government has renounced all its Rights and will sell them to interested buyers through the Nairobi Stock Exchange.
The company is converting preference shares held by the government to ordinary shares, issuing new shares and carrying out a share split, which will increase the number of its shares to 1.73 billion from 79.13 million.