Kenya Power targets Sh2.4bn revenue from street lights

Corporate News 

A Kenya Power worker repairs street lights in Mombasa. PHOTO | FILE 

By MUGAMBI MUTEGI

In Summary

• Kenya Power currently earns Sh392 million every year from 3,172 customers connected to street lights countrywide, according to its latest annual report.
• The firm is banking on the recently-launched Sh10 billion project to light up Nairobi streets to significantly boost this revenue stream.

Kenya Power is targeting a nearly five-fold jump in income from Nairobi street lights to Sh2.4 billion per annum beginning June next year, when it expects to have completed a new plan to light up the capital city.

The electricity distributor currently earns Sh392 million every year from 3,172 customers connected to street lights countrywide, according to its latest annual report.

Nairobi contributes a lion’s share of this with Sh372 million.

The NSE-listed firm is now banking on the recently-launched Sh10 billion project to light up Nairobi streets to significantly boost this revenue stream.

“We forecast that the street-lighting business in Nairobi will earn the company a monthly revenue of Sh200 million from the end of the current financial year,” said Kenya Power managing director Ben Chumo on Friday.

He said the company plans to install lights along 491 city streets in a quest to turn the capital into a 24-hour economy.

“At the moment, 116 Nairobi streets have the necessary lighting infrastructure while 374 others will require new poles and cabling,” he added.
Nairobi, which is home to about four million people, has approximately 24,000 street lights and 7,300 public lighting masts covering 30 per cent of the city.

Forty per cent of this infrastructure is not working and requires refurbishment.

Kenya Power in October received the first tranche of Sh381.2 million (of the Sh10 billion) from the Treasury to kick-start the Nairobi street lighting project.

The refurbishment expenditure in the new plan stands at Sh953 million while Sh9.84 billion will be spent on installing 12,959 new public lighting masts and 54,029 street lights.

Crucial economic areas like Baba Dogo, Kariobangi Light Industries, Industrial Area, Kamukunji and Gikomba are some of the places set to benefit from better lighting.

Others include the Central Business District (CBD), Eastleigh, Kahawa West, Buru Buru and Embakasi.

Kenya Power’s street lighting customers countrywide were 3,172 as of June this year, having grown by 52 per cent in the past five years, a record the electricity distributor is keen on improving.

The power firm earned Sh415 million in 2010, but this has since dropped to Sh392 million.

Dr Chumo says the company now plans to expand the street lighting plan to other major cities across the country, adding that the expansion drive would in the long run boost the firm’s bottom line

“The plan is to now expand the project to other cities like Nakuru, Eldoret, Mombasa and Kisumu and ensure that street lighting revenues become a major earner for the company,” he said.

The company’s net earnings increased 88 per cent to Sh6.4 billion in the period to June 2014 compared to Sh3.4 billion a year earlier, helped by higher electricity tariffs.