AUSTERITY: Last Mile Connectivity project faces Sh3.1 billion underfunding on austerity. The government is planning a massive underfunding of three priority power projects in a move likely to deny households access to cheaper power. These projects were earmarked by the Ministry of Energy for continued implementation in the 2023/24 FY but are now facing a bleak future following budget shortfalls as government implements austerity measures.

Among the three priority projects set for a big dent includes the last Mile connectivity project which requires Sh4 billion in the upcoming fiscal year but the government is only willing to give the project a meagre Sh890 million budget, about 77.8 per cent less.

Connectivity subsidy project has been proposed to be left without Sh1.23 billion from next July against a requirement of Sh1.33 billion, giving the project just Sh100 million. The budget caters for the maintenance, rehabilitation and upgrade of the generators supplying powers in the off-grid regions.

“The amount (Sh1.33 billion) is therefore necessary to ensure reliable power supply to the citizens with the underserved regions,” Energy Principal Secretary Alex Wachira told the Vincent Musyoka-led departmental Energy Committee.

The third project, Rural Electrification Scheme, wanted Sh4 billion but based on the budget policy statement 2023, the Treasury has only offered Sh1 billion. The cost of the project’s maintenance has been accumulating, with the pending amount hitting Sh19 billion as of end of last Financial Year, with Kenya Power banking on the partial settlements to boost its financial position.

More funding

Energy players drawn from the Ministries Departments and Agencies (MDAs) are seeking the support from the National Assembly’s energy committee to help them lobby before the budget and appropriation committee (BAC) for more funding in the full financial year.  

“I think there is time to harmonise these budgets to push money to areas that can support growth areas… The last mile project is pushing the development out of urban areas to rural areas to sour growth,” Energy Cabinet Secretary Davis Chirchir said.