Kenya Power to run transmission lines for 10 years after Ketraco takeover
Kenya Power employees replacing an electricity pole. Kenya Power will continue to operate and maintain its transmission lines after selling them to Ketraco.
Kenya Power will continue to operate and maintain its transmission lines for at least 10 years at a fee once it sells them to the Kenya Electricity Transmission Company (Ketraco).
The government had last year said the transfer of Kenya Power’s transmission lines would see more than 1,200 staff from the utility transferred to Ketraco.
The latest revelation that Kenya Power will continue to operate and maintain the lines for at least a decade, therefore, means an earlier expected transfer of workers between the duo will also be postponed.
Transfer of the transmission lines to Ketraco was one of the major recommendations made by the Presidential Taskforce on Review of Power Purchase Agreements (PPAs), which submitted its report to former President Uhuru Kenyatta in September 2021.
Yesterday, Kenya Power issued an Expression of Interest (EiO) searching for a transaction advisor that will be charged with evaluating the market value of the assets before they are sold to Ketraco.
Ketraco was established in 2008 and is 100 per cent owned by the government, but Kenya Power is listed at the Nairobi Securities Exchange (NSE) where the government has a stake of 50.09 per cent while private shareholders own a 49.91 per cent stake.
It is this minority private ownership in Kenya Power that has delayed the process of the transfer of its transmission assets to Ketraco for more than two years.
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The utility says a transaction advisor, once picked, has to come up with a valuation of the assets within 12 months to enable the transfer.
“The matter at hand is about the transfer of transmission line assets (with provisioning of requisite resources) from KPLC to Ketraco. KPLC is to transfer transmission line assets to Ketraco at commercial market value,” said the company.
It added: “KPLC and Ketraco are to enter into an O&M agreement for operations and maintenance of the lines upon transfer where KPLC will maintain and operate the network for a minimum period of 10 years.”
The transaction advisor will be tasked with finding the market value of the transmission lines, equipment, land, buildings and rights of way, common user services, assignments, rights, intellectual property, hosting, and colocation license fees and rentals.
As part of the taskforce’s recommendations, the Energy and Petroleum Regulatory Authority (Epra) in January last year also transferred the role of System Operator of the national power grid from Kenya Power to Ketraco to ensure better operation of the grid.
A system operator controls the energy mix from different producers to primarily ensure grid stability and that consumers get the cheapest available power.
