By Duncan Miriri
NAIROBI (Reuters) – Kenyan telecommunications operator Safaricom said on Friday it had submitted a proposal to Kenya Power to install a $ 300 million smart meter system in the utility, confirming documents seen by Reuters.
The telecommunications company said it was now awaiting the utility’s response, adding that it would install and operate the smart meter system for eight years if the deal is approved, before handing it over to Kenya Power.
Kenya Power said it had received Safaricom’s proposal and was reviewing it in accordance with internal processes.
The state-controlled electricity company, the main electricity distributor in the East African country, suffers annual losses of 23.46% on its transmission network, well above the global benchmark by 15%.
Safaricom’s proposed system will use the Internet of Things, which enables real-time network monitoring, to reduce power system losses by eight percentage points in two years, the company said.
“The technology has the potential to meet many of our customers’ business needs,” said Safaricom.
Safaricom is proposing to divide the additional revenue generated by lower system losses, projected to 71.7 billion Kenyan shillings ($ 651.23 million) over eight years, of which 75% goes to Safaricom and 25% to Kenya Power.
The telecom operator will bear the cost of installing 330,000 smart meters for consumers, transformers and feeders.
Kenya Power, which was once considered a safe bet on the Nairobi Stock Exchange, has slipped into the red in recent years in part due to losses in the power system, sending its shares near all-time lows. The company is also heavily in debt.
The Kenya Private Sector Alliance (KEPSA), an umbrella lobby of private companies, is supporting a program to restructure public service debt and substantially reduce losses in its system to improve its business performance, she said. said in a statement Friday, citing Kenya Power’s strategic importance to the economy.
($ 1 = 110,1000 Kenyan shillings)
(Reporting by Duncan Miriri; editing by Jason Neely, Alexander Smith and Jane Merriman)