In the past two weeks, I have been analysing what I believe lies ahead for Kenya’s power sector — namely that we could within a few years have cheaper electricity, as well as a more reliable supply.
The implications of this development are clear enough. First, we would all have much more manageable domestic electricity bills to pay every month.
And second, the country would at last have a realistic shot at becoming an industrialised nation our current cost of power being the single greatest impediment to the Kenyan dream of industrialisation.
It is impossible to exaggerate the significance of this. Although we have always had a “Minister for Industry” right from Independence, the fact remains that our economy continues to be somewhat humiliatingly, given we have been independent for over 50 years a typical developing nation “dependency economy” reliant on agriculture exports and tourism.
So here is the question: If you were to start with a situation like ours, where electricity costs should ideally be just a third of what we pay for power, now how would you go about getting electricity costs to move swiftly downwards?
Well, progress in developing nations is often a factor of effective imitation. There is usually no need to reinvent the wheel. All you have to do is study what those who succeeded before you have done, and apply the lessons to your own situation.
For example, you have to remember that what brought about Kenya’s stunning success in the telecommunications sector was not that the government invested huge sums in the old Kenya Posts and Telecommunications Corporation. Rather, a new investment and regulatory environment was created which made it possible for Kenya to invite international telecoms investors to bid for licenses in an open auction.
And in one step, the country moved from a framework in which taxpayers’ money was routinely wasted on supporting the old phone service, to one in which, before the new investors even installed their first telecoms masts, they had already made a substantial contribution to the Exchequer.
When it comes to the power sector, this is where the Renewable Energy Solutions for Africa (RES4Africa) conference held at Strathmore University in late October comes in.
You could say that this conference set out to create the framework on which a modern energy sector could be built – focused on renewable energy sources like solar panels, wind turbines, hydroelectric power, and geothermal power.
The Italy-based RES4Africa is a platform for dialogue between the public and private sectors, dedicated to supporting the deployment of renewable energy throughout sub-Saharan Africa.
Indeed, it actually started off as the RES4MED Renewable Energy Solutions for the Mediterranean and was focussed on finding renewable energy solutions for Egypt, Tunisia, Morocco and Jordan. T
he progress made by this initial effort is what then led to the conference at Strathmore University, which had top officials from Kenya’ s own Ministry of Energy, the European Union delegation to Kenya and various big fish.
They included local and international investors and suppliers of the products and services, that would go into the creation of a modern energy sector.
As one of the smaller fish attending this conference, what I came away with is that the essential prerequisite for the kind of modern power sector envisioned at this event — cost-effective, sustainable, environment-friendly, integrated, decentralised, etc. is that Kenya must strive to “de-risk” energy investment by creating a world-class regulatory and legislative framework, such as that which made our modern telecommunications sector possible.
And this must involve “listening to the voice of the investors” to get some idea of the conditions under which such investors would eagerly deploy the billions of dollars needed to bring affordable electricity to even the remotest Kenyan village.
For such is the way of the world: Government technocrats and investors sit and talk in relative obscurity for many months, and if their plans are successfully implemented in time, we all receive the very real benefits of advanced products and services.
In many cases, these are benefits which were available all along, only we had not created the environment in which they could flow to us.