Chinese firm to build factory for prepaid electricity meters in Kenya

Africa Business Featured Regional

Power utility firms in East Africa will soon get locally made prepaid meters following the decision by a Chinese firm to open a factory for prepaid meters as it seeks to tap into growing billing market in the region.

Kenya’s power utility firm Kenya Power that had been approached by the Chinese firm to advise it on how to align their production with local market specifications has welcomed the move saying it will lower the cost for Kenyan made devices while creating employment opportunities.

“Units made locally will be cheaper, translating to overall reduced costs,” said the Kenya Power chief executive Dr. Ben Chumo. However, he did not disclose the name of the company but said it plans to use the Kenyan factory to supply regional markets.

The firm imports transformers and prepaid meters from China and India as it sources other products from the local market such as poles, cables and connectivity devices as part of the move “buy-Kenyan-build Kenya campaign.”

The Nairobi-bourse listed electricity distributor is keen to grow usage of prepaid meters to reduce electricity defaults and cut operation costs, especially in the countryside. Kenya Power reckons the prepaid billing system is key to boosting its cash flow and cutting postage costs in issuance of monthly invoices to post-paid customers.

It will also eliminate the need for more meter readers. Dr. Chumo said that 70 per cent of its 4.9 million customers are on prepaid and smart meters, and then later it will target large power consumers like industries.

The company plans to connect all customers to prepaid meters where consumers on prepaid meters pay for power in advance, similar to mobile airtime top-ups, hence helping Kenya Power receive its revenues in full.

The firm has invited expression of interest from local investors to enter joint ventures with foreign firms to start manufacturing transformers locally.
This comes in the face of growing mass connections of homes to power following the cut in connectivity fee from Sh35, 000 to 15,000 for buildings located within 600 metres to the nearest transformer.

Kenya Power in 2011 announced plans to establish a transformer manufacturing plant in Kenya to help the country meet growing demand for power and diversify its earnings.

Currently, Kenyan firms have only the capacity to repair transformers and meters.

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