2012/2013 Annual Report and Financial Statements

Transcription

1 2012/2013 Annual Report and Financial Statements

2 Cable protection cover tiles laid, awaiting completion of backfilling for the 220kV underground cable to Embakasi Substation, part of lot 3- Mombasa- Nairobi Transmission Line Project.

3 2012/2013 Annual Report and Financial Statements 1

4 Our Vision To be a world-class electricity transmission company and the leading inter-connector in Africa Our Mission To build and operate a national electricity transmission network that is reliable, efficient, effective, safe and environment-friendly through innovative and best practices; and to promote regional power trade for socio-economic development. Our Core Values CUSTOMER FOCUS INTEGRITY, TRANSPARENCY AND ACCOUNTABILITY TEAMWORK CREATIVITY AND INNOVATION COMMITMENT EQUITY PROFESSIONALISM The Company commits itself to attaining the highest standards in service delivery to all stakeholders. The Company is committed to acting in an honest, transparent and responsible manner while implementing its programmes. The Company employees will work in unison at all levels and embrace a participatory approach in implementing all programmes and activities. The Company will be a learning organization that embraces and continuously introduces change in its business processes. The Company will embrace self-drive and hard work in attaining the highest standards in service delivery to all stakeholders. The Company will uphold the highest levels of impartiality by treating all stakeholders without any discrimination whatsoever. The Company s operations will be guided by professional ethics aimed at building an appropriate corporate culture and creating the right corporate image. 2

5 Content 1. Corporate Information Board of Directors Senior Management Staff Notice of Annual General Meeting Chairman s Statement Managing Director & CEO s Overview Corporate Governance Statement Report of the Directors Statement of Directors Responsibilities Report of the Auditor - General Financial Statements Statement of Comprehensive income Statement of Financial Position Statement of Equity Statement of Cash flows Notes to the Financial Statements

6 Corporate Information Principal Place of Business Directors Secretary 2nd Floor, Capitol Hill Square Chyulu Road, Upper Hill P.O. Box Nairobi KENYA Dr. Kenneth K. Sigilai Chairman (appointed w.e.f ) Eng. Joel M. Kiilu - Managing Director & CEO Eng. Joseph K. Njoroge -PS, MoE&P- (appointed w.e.f ) Mr. Henry Rotich-CS, The National Treasury - (appointed w.e.f ) Mr. Daniel K. Mwaura Mrs. Patience K. Nyaoga Mrs. Elizabeth W. Maina Ms. Esther N. M ithiria Mr. Fidesius M. Nyaga ( appointed w.e.f ) Mrs. Felister Kivisi (Alternate to Mr. Henry Rotich) Eng. Julius Mwathani - (Alternate to Eng. Joseph K. Njoroge) Mr. Justus Kageenu- (Ceased w.e.f ) Mr. Patrick M. Nyoike (Ceased w.e.f ) Mr. Joseph K. Kinyua (Ceased w.e.f ) Duncan K. Macharia, B.com, MBA, CPS(K) P.O. Box Nairobi. Kenya Kenya Commercial Bank Limited Moi Avenue P.O. Box Nairobi Bankers Cooperative Bank of Kenya Limited, Upper Hill P.O. Box Nairobi Citibank, NA City House, Upper Hill P.O. Box Nairobi Auditors Advocates Deloitte & Touche (For Auditor-General) Certified Public Accountants (Kenya) Deloitte Place, Waiyaki Way, Muthangari P.O. Box Nairobi The Company maintains a Panel of Advocates 4

7 Night view of the just energized Malindi Substation. This is part of the 220kV Rabai- Malindi- Garsen- Lamu project. 5

8 The Board of Directors as at 28 th February, 2014 Eng. Joel M. Kiilu Managing Director and CEO Mr. Henry Rotich CS The National Treasury Dr. Kenneth K. Sigilai Chairman Eng. Joseph K. Njoroge PS MoE&P Mrs Elizabeth W. Maina Director Mrs. Patience K. Nyaoga Director 6

9 Eng. Julius Mwathani Director (Alternate, PS MOE&P) Mr. Daniel K. Mwaura Director Mrs. Felister S. Kivisi Director (Alternate, CS The National Treasury) Mr. Duncan K. Macharia Company Secretary Mr. Fidesius M. Nyaga Director Ms. Esther N. M ithiria Director 7

10 KETRACO Board of Directors Profile Dr. Kenneth K. Sigilai Chairman Born in 1967, Dr. Kenneth Sigilai holds a graduate and post graduate degree in Medicine from the University of Nairobi. He is a specialist general surgeon currently working at Kapkatet District Hospital. He is also a clinical researcher having graduated from the University of Liverpool with a Master of Science in Clinical Research Administration (MCR). Dr. Sigilai has a wealth of experience in management, having served in management positions for the last 15 years during which he also served as District Medical Officer and Medical Superintendent. He has attended various trainings including performance contracting and strategic management. Dr. Sigilai was appointed the Chairman of the Board of KETRACO on 10 th January, Eng. Joel M. Kiilu Managing Director & CEO Born in 1956, Eng. Joel Kiilu is an Electrical Engineer and holds a Master s Degree in Business Administration (MBA) from the University of Nairobi. He also holds a Bachelor of Science (Bsc.) degree in Electrical Engineering from the same University. Eng. Kiilu is a member of the Institution of Engineers of Kenya (MIEK) and the Institution of Electrical and Electronic Engineers (MIEEE). He joined The Kenya Power & Lighting Company Limited as a trainee Engineer in 1977 and rose to the position of Chief Manager, Energy Transmission from which he left to join KETRACO as CEO in the year 2009 to date. Eng. Joseph K. Njoroge- Principal Secretary, Ministry of Energy & Petroleum Eng. Joseph K. Njoroge was born in 1958 and holds a Bachelor of Science degree in Electrical Engineering and Master of Business Administration with a major in Strategic Management from the University of Nairobi. He has over 26 years experience in engineering and management. Mr. Njoroge is a Chartered Electrical Engineer, a Member of the Institute of Engineering and Technology, UK, a Registered Consulting Engineer, and is also a Member of the Institution of Engineers of Kenya (MIEK). He joined the Board upon his appointment as the Principal Secretary, Ministry of Energy & Petroleum on 26 th June, Mr. Henry Rotich, Cabinet Secretary, The National Treasury Born in 1969, Mr. Rotich is the Cabinet Secretary of The National Treasury. He has a Master s Degree in Public Administration (MPA) from the Kennedy School of Government at Harvard University, a Master s Degree in Economics and a Bachelor s Degree (First Class Honours) from The University of Nairobi. He was previously the Head of Macroeconomics in The National Treasury, and has also served as an Economist with the International Monetary Fund (IMF), Nairobi Office. Mr. Rotich joined the Board of KETRACO upon his appointment as Cabinet Secretary to The National Treasury on 15 th May, Mr. Daniel K. Mwaura Born in 1966, Mr. Daniel Karuru Mwaura is an Advocate of the High Court of Kenya in private practice and has practised Law for more than 18 years. Mr. Mwaura is also a Commissioner for Oaths, Notary Public and holds a Bachelor of Laws degree, Bachelor of Arts (Econ) both from Indore University and a post graduate diploma in Law from the Kenya School of Law. He was appointed to the Board of KETRACO on 16 th January, Mrs. Elizabeth W. Maina Born in 1962, Elizabeth Maina is the holder of a Master s in Education (Planning & Administration), from the University of Nairobi and Bachelor of Education degree from Kenyatta University. She is currently pursuing a Diploma in Human Resource Management. She has served in leadership positions as a principal of various secondary schools, and as chairman of community based empowerment programmes and is a member of Mathira Constituency Development Fund and Secretary of the Bursary Committee. Elizabeth was appointed to the Board of KETRACO on 10 th February,

11 Mrs. Patience K. Nyaoga Born in 1968, Patience Nyaoga holds a Master of Business Administration, (MBA) Marketing Major from The University of Nairobi, a Bachelor of International Business Administration (IBA) from the United States International University (USIU) and has attended Management courses both locally and internationally. Patience is a member of Kenya Associations of Business Owners (KAWBO), Institute of Directors of Kenya, PTA Braeburn School (Friends of Braeburn), All Saints Cathedral Church and Anglican University. Mrs. Nyaoga has worked for both Private and Public Corporations and is currently the Managing Director of Tintoria Limited, a medium sized enterprise with various branches in Nairobi County. Patience was appointed to the Board of KETRACO on 10 th February, Ms. Esther N. M ithiria Born in 1974, Esther Nkatha is currently pursuing a PhD in Business Administration (Finance Option) at the University of Nairobi. She has a Master of International Economics and Management (Banking and Finance Option) from SDA Bocconi School of Management, Milan and a Bachelor of Commerce (Accounting Option) degree from Kenyatta University. She is also a Certified Public Accountant, CPA (K) and a member of ICPAK. Esther has worked as a consultant, a financial and credit analyst in various institutions in Italy and Kenya. She is currently working as a lecturer at the Catholic University of Eastern Africa in the Department of Accounting and Finance. She has written and published research papers on topical issues in the field of business and finance. Esther is a Fellow of the Higher Education Academy, UK and a Board member and Trustee of Cardinal Otunga High School and Charitable Trust. She is also a Director of Chlorophyll Investment Company Ltd. Esther was appointed to the Board of KETRACO on 10 th February, Mr. Fidesius Muchira Nyaga Mr. Nyaga was born in 1944 and holds a Bachelor of Arts degree in Accounting and Economics from Makerere University. He is a fellow of the Chartered Institute of Secretaries UK, a member of the Institute of Certified Public Secretaries of Kenya (ICPSK) and a certified Public Accountant with over 30 years of experience in financial management. He was appointed a director of KETRACO on 18 th December He is also a director of Thiba Holdings Limited and Fide Registers Limited. Mrs. Felister S. Kivisi (Alternate Director to Mr. H. Rotich) Born in 1967, Felister Saliku Kivisi, serves as Senior Assistant Director in the The National Treasury, Debt Management Department. She holds a Bachelor of Arts degree from The University of Nairobi (1990) and a Master of Arts degree in International Relations from the University of Leeds (1992). She is currently undertaking PHD studies in International Relations. Felister who serves as Alternate Director to Mr. Henry Rotich, CS, The National Treasury, has a wealth of experience having worked in The National Treasury from 1994 to date. Eng. Julius Mwathani (Alternate Director to Eng. J. Njoroge) Eng. Julius Mwathani was born in He holds a Bachelor of Science degree in Mechanical Engineering and an Executive Master of Business Administration degree. Eng. Mwathani is registered by Engineers Registration Board of Kenya and a member of the Institution of Engineers of Kenya (NIEK). He has wide experience in public sector management, having worked for more than 20 years in various senior positions in Government. Mr. Duncan Macharia, Company Secretary Mr. Duncan Macharia was born in He holds a Master of Business Administration degree from the University of Nairobi and a Bachelor of Commerce (Business Administration Option) degree from the same university. He is currently pursuing a Bachelor of Law degree at the School of Law, University of Nairobi. Duncan is a Certified Public Secretary of Kenya (CPS) K and previously worked as Deputy Company Secretary in The Kenya Power & Lighting Company Limited before he left after serving the company for over 18 years to join KETRACO. He is also a member of the Institute of Directors, (IOD) Kenya. 9

12 Management Team as at 2 nd May, 2014 Eng. Joel Kiilu Managing Director & CEO Duncan Macharia, Company Secretary/Chief Manager, Legal Services FCPA Fernandes Barasa Chief Manager, Finance & Accounts Finance Eng. (Dr.) John Mativo Chief Manager, Planning & Development Mumbua Giati Chief Manager, ICT Agnes Ongadi Chief Manager, Human Capital & Administration Joe Ager Chief Manager, Corporate Services 10

13 MANAGEMENT PROFILES Eng. Joel Kiilu Managing Director & CEO Born in 1956, Eng. Joel Kiilu is an Electrical Engineer and holds a Master s Degree in Business Administration (MBA) from the University of Nairobi. He also holds a Bachelor of Science (Bsc.) degree in Electrical Engineering from the same University. Eng. Kiilu is a member of Institution of Engineers of Kenya (MIEK), a member of the Institution of Electrical and Electronic Engineers (MIEEE). He joined The Kenya Power & Lighting Company Limited as a trainee Engineer in 1977 and rose to the position of Chief Manager, Energy Transmission from which he left to join KETRACO in the year 2009 to date. Mr. Duncan K. Macharia Company Secretary / Head of Legal Services Born in 1960, Duncan holds a Masters of Business Administration degree from the University of Nairobi and a Bachelors of Commerce degree from the same University. Duncan is a Certified Public Secretary of Kenya (CPS)K and has wide experience in management and corporate secretarial function having previously worked as Deputy Company Secretary in The Kenya Power & Lighting Company Limited before he left after serving the company for over 18 years before joining KETRACO as the Company Secretary. He is also a member of the Institute of Directors, (IOD) Kenya. FCPA Fernandes O Barasa- Chief Manager, Finance & Accounts Born in 1973, FCPA Barasa holds a Bachelor of Commerce (Accounting) and MBA-Finance Degrees from Kenyatta University. He is also a Certified Public Accountant of Kenya (CPA-K).He is a Council Member, Convenor of the Finance & Strategy Committee and Alternate Convenor of the Member Services Committee of the Institute of Certified Public Accountants of Kenya (ICPAK). Prior to joining KETRACO, FCPA Barasa worked as Treasury Manager and later Head of Factories Accounts at Kenya Tea Development Agency Limited. He also worked for Kenya Airways and East Africa Re in senior management positions. He has a wealth of experience in Accounting, Risk and Financial Management. Dr. (Eng.) John Mativo - Chief Manager, Planning & Development Born in 1968, John Mativo is a Civil Engineer and holds a Doctorate degree from Tokyo Metropolitan University (Japan), a Master s degree from Tongji University (China) and a Bachelor s degree from the University of Nairobi. John is a Registered Engineer (Kenya Engineers Registration Board) and a Corporate Member of the Institution of Engineers of Kenya. Before joining KETRACO as Head of Technical Services, he previously worked as a Consultant for European Union funded projects in the Local Government and as an Engineer in the Ministry of Roads and Public Works. Mrs. Mumbua Giati - Chief Manager, ICT Born in 1960, Mrs. Mumbua Giati holds a Bachelor of Commerce degree (Management Science option) from the University of Nairobi. Mumbua has a wealth of training and experience in IT, having worked for The Kenya Power & Lighting Company Ltd. for 30 years and seen the company s ICT transition from proprietary legacy systems to modern ERP solutions. She previously held the position of Chief Systems Analyst, SAP at Kenya Power before joining KETRACO as Head of ICT in December She is a member of the Computer Society of Kenya. 11

14 Ms. Agnes Ongadi -Chief Manager, Human Capital Development & Administration Born in 1970 Agnes holds a Bachelor of Commerce degree from the University of Nairobi, an Executive MBA from Moi University and a Post-Graduate Diploma in Human Resource Management from Kenya Institute of Management. Agnes is a full member of both the Kenya Institute of Management (AMKIM) and Institute of Human Resource Management. Prior to joining KETRACO she worked with the First American Bank and Kenol/Kobil Petroleum Company. Mr. Joe O. Ager- Chief Manager- Commercial Services Born in 1949, Joe Ager holds a Master of Business Administration degree (MBA) and a Bachelor of Science (BSc) in Marketing from the University of South Africa. Prior to joining KETRACO Ager worked as a Customer Relations and Marketing Manager with The Kenya Power & Lighting Company Limited. He also worked as Managing Consultant with Sparrow and Barlow Associates, Head of Operations with British Telecoms UK, Head of Strategy and Business Development with Caudwell Group Ltd. and Head of Group Sales with British Airways Plc (UK). 12

15 NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the 4 th annual general meeting of the Kenya Electricity Transmission Company Limited will be held at Capitol Hill Square, 2 nd Floor, Upper Hill, Chyulu Road, Nairobi, on 23 rd May 2014 at 11:00 a.m. to transact the following business:- 1. To read the Notice convening the Meeting. 2. To receive and consider the Company s audited financial statements for the twelve months ended on 30 th June 2013, together with the Chairman s, Directors and Auditors Reports thereon. 3. To note that Directors do not recommend payment of a dividend for the period under review. 4. Election of Directors: To note that there will be no election or rotation of directors for the following reasons:- Whereas the Company was incorporated under the Companies Act, Cap 486 as a private company limited by shares, it is wholly owned by the Government. The Company is, therefore, governed under the provisions of the State Corporations Act, Cap 446 by virtue of Section 2 (c) of the Act. Further, Article 2 of its Memorandum and Articles of Association provides that The appointment and removal of Directors shall be governed by the provisions of the State Corporations Act, Cap 446, of the Laws of Kenya as amended from time to time. Each Director shall hold office until he is removed or replaced as above provided. KETRACO has also complied with Cap 446 Section 6 which provides for the composition and appointment of Directors. Under the circumstances, there will be no election or rotation of Directors. 5. To note that the audit of the Company s books of account will be undertaken on behalf of the Auditor General by M/s Deloitte & Touche, an audit firm appointed in accordance with Section 14(3) of the State Corporations Act, and Section 39(1)(b) of the Public Audit Act, M/s Deloitte & Touché carried out the audit for the period ended 30 th June, To authorise the Directors to fix the Auditors remuneration. 7. To note that Directors fees for the period ended 30 th June, 2013 will be determined in consultation with the Ministry of Energy & Petroleum and The National Treasury. By Order of the Board Duncan Macharia Company Secretary 2 nd May,

16 ILANI YA MKUTANO MKUU WA MWAKA Ilani inatolewa kwamba Mkutano Mkuu wa nne wa kila Mwaka wa Kenya Electricity Transmission Company Limited utafanyika katika jumba la Capitol Hill Square, ghorofa ya pili Upper Hill barabara ya Chyulu Nairobi, mnamo Mei saa tano asubuhi kujadili yafuatayo: - 1. Kusoma Ilani ya kuitisha Mkutano huo. 2. Kupokea, kujadili na kuidhinisha taarifa za fedha za kampuni zilizokaguliwa kwa muda wa miezi kumi na miwili kufikia tarehe 30 Juni, 2013, pamoja na ripoti za Mwenyekiti, Wakurugenzi na Wakaguzi wa hesabu. 3. Kufahamu kwamba Wakurugenzi hawapendekezi malipo ya gawio kwa kipindi cha mwaka unaoangaziwa. 4. Uchaguzi wa Wakurugenzi: Kufahamu kwamba hakutakuwa na uchaguzi au mzunguko wa wakurugenzi kwa sababu zifuatazo: - Wakati Kampuni ilianzishwa chini ya Sheria ya Makampuni, Sura ya 486 kama kampuni ya kibinafsi inazo hisa kiwango fulani, ni inayomilikiwa na Serikali. Hivyo basi, Kampuni inaongozwa na serikali chini ya masharti ya sharia za mashirika ya umma, sura ya 446 kwa mujibu wa sehemu ya 2 (c) ya Sheria. Aidha, Ibara ya pili ya Mkataba wake na Makala ya Chama kutoa kwamba uteuzi na kuondolewa kwa Wakurugenzi utaongozwa na masharti ya sharia za mashirika ya serikali, Sura ya 446, ya Sheria za Kenya kama inavyorekebishwa mara kwa mara, Kila Mkurugenzi atashika kiti hicho hadi aondolewe au abadilishwe kama ilivyoandikwa hapo juu. KETRACO pia inakubaliana na Sura ya 446 Sehemu ya 6 ambayo inatoa kwa muundo na uteuzi wa Wakurugenzi. Chini ya mazingira hayo, hakutakuwa na uchaguzi au mzunguko wa Wakurugenzi wakati huu. 5. Kufahamu kwamba ukaguzi wa vitabu vya kampuni vya hesabu vitafanyika kwa niaba ya mdhibiti na Mkaguzi Mkuu wa Hesabu M/s Deloitte & Touché, kampuni ya ukaguzi iliyoteuliwa kwa mujibu wa kifungu 14 (3) cha sheria za mashirika ya serikali, na sehemu ya 39 (1) (b) ya Sheria ya Ukaguzi wa shirika za Umma ya mwaka M/s Deloitte & Touché ilifanya ukaguzi kwa kipindi kilichomalizika Juni 30, Kuwaruhusu wakurugenzi kuamua malipo ya wakaguzi ya kipindi kilichomalizika tarehe 30 Juni Kutambua kwamba ada ya wakurugenzi kwa ajili ya kipindi kilichomalizika Juni 30, 2013 itaamuliwa kwa kushauriana na Wizara ya Kawi na Petroli na Hazina ya Taifa. Kwa Amri ya Halmashauri Duncan Macharia Katibu wa Kampuni Mei 2,

17 CHAIRMAN S OVERVIEW Welcome to the Kenya Electricity Transmission Company (KETRACO) annual report and audited financial statements for the financial year ended June This happens to be my first report to present to KETRACO s Shareholders since my appointment as Chairman of the Board on 10 th January I take this button that has been handed over by my predecessor as a challenge and promise our Stakeholders that the coming years will see the company meeting and exceeding our customers and shareholders expectations. Review of the Economy The Kenyan economy experienced slow growth in 2013 and realized a Gross Domestic Product (GDP) growth rate of 4.7% compared to 4.6% in 2012 and 4.4% in This performance was realised through the stable macroeconomic environment for the better part of the year; low and stable inflation supported by improved supply of basic foods, lower international oil prices and lower costs of electricity; infrastructural development and the construction sector. However, the lower than projected economic growth was attributed to (i) depressed performance of the rains that affected the agriculture sector which is the single largest contributor to our GDP; (ii) decline in exports resulting to worsening of trade balance; (iii) comparably higher interest rates; (iv) reduced spending by Government agencies, during the transition period; (v) risk aversion in the lead up to the 2013 general election; and (vi) insecurity concerns. Economic Outlook for 2014 The macroeconomic stability witnessed in 2013 continued into the first quarter of 2014 and is likely to be maintained throughout the rest of the year. Operationalization of the development budget in the Counties is expected to spur further economic growth. Private consumption is also likely to improve given the stable interest rates and low inflation regime. Recent discoveries of petroleum oil and natural gas are likely to trigger more foreign direct investment inflows. The manufacturing sector s performance is projected to maintain its current growth path given the positive growth within the region. Similarly, the financial intermediation sector is likely to maintain its momentum in 2014 mainly on account of enhanced performance and innovations in the sectors. Investment in the construction industry is likely to remain robust against a background of stable interest rates coupled with the ongoing government infrastructural projects and the private sector s resilient participation especially in the real estate development. Review of the Electricity Sub-Sector As various sectors in the country endeavour to meet their sectoral targets towards achieving Vision 2030, at KETRACO, we are happy to report that we continue to implement 14 Vision 2030 Flagship Projects across the country. I believe we have the most flagship projects being implemented by one organisation. 15

18 That is both an honour and responsibility that we are happy to bear and deliver. Access to affordable electricity is a theme that the new government has taken with one-minded focus, promising to lower the current costs and ensure a higher reach than the current 30% of the population. It is worth noting that KETRACO has rolled out an ambitious programme to construct new 4,600kms of transmission lines, 44 new substations and extend 26 existing substations by This will address the challenges that have continued to plague the electricity sector in the country. Delegates interact at the KETRACO stand during the official Launch of the 5000+MW Electricity Project for Kenya at the KICC. During the last quarter of the year under review the government launched the 5000+MW evacuation projects which are way above the 4,600kms of high-voltage lines that we have been implementing in the last 4 or so years we have been operational. We are happy to be playing probably one of the biggest roles in ensuring that the National Grid extends to new areas, the existing lines are strengthened and evacuation from all current and proposed generation plants is facilitated promptly. The ambitious programme of increasing additional generation capacity of MW by 2017 will see KETRACO play a significant role in this programme by constructing an extra 948kms of transmission lines and related substations in various parts of the country to evacuate this power.this will address the challenges that have continued to plague the electricity sector in the country. The Government, on behalf of KETRACO, has continued to seek and obtain concessional funding from our Development Partners which supplement funds from the Exchequer to facilitate this expansion. In addition, the Company is working with regional power utilities to fast track interconnectivity in order to access cheaper electricity supply through regional power trade. Review of Performance In the year under review, KETRACO completed and energized the 33km single circuit Mumias Rangala line, 17km double circuit Kilimambogo Thika section and 20km single circuit Thika Nyaga section. Thetotal income during the year amounted to KShs.1,265 million compared to KShs.1,276 million in 2011/2012, while the total operating expenses for the period was KShs.774 million compared to Kshs.1,218 million the previous year. Included in the total operating expenses for the year is a provision for doubtful debts amounting to Kshs.47 million attributed to the wheeling charge disputed by Kenya Power, which is still being revised. Surplus for the year before tax was KShs.491million while net surplus was KShs 291 million. This compares to a surplus before tax of Kshs.58 million and net surplus of Kshs.34 million in the 2011/2012 financial year. The asset base grew from Kshs.28,743 million in 2012 to Kshs.43,688 million in This represents an increase of 52% which is commendable. 16

19 Future Outlook The Company has put in place an elaborate plan to fast-track the expansion of electricity transmission infrastructure both in the short-term and Mid-term. In the 2013/2014 financial year KETRACO intends to complete the 328km 220kV Rabai Malindi- Garsen Lamu line, the 77km 132kV Thika Githambo line section and fully energize the 220kV Rabai substation. In the same financial year, the company intends to commence the construction of approximately 700km of lines under the Kenya Power Transmission System Improvement Projects and the Indian EXIM funded projects. KETRACO will also procure contractors for the Mariakani substation, Isinya substation and the Menengai Soilo line. With more transmission lines being completed and commissioned, we expect to substantially increase the amount of power that will be transmitted through our network, impacting positively on our turnover. With the continued support of our Government, the development partners and all other stakeholders, the planned transmission infrastructure projects will be implemented successfully which will go a long way in achieving the targets set out for the realisation of Kenya Vision Tribute Over the past year, there have been a number of changes in the Board. Mr. Justus Kageenu left the Board as Chairman while Mr. Patrick M. Nyoike and Mr. Joseph K. Kinyua also left the Board after leaving their positions as Permanent Secretaries. In their place Mr. Henry Rotich and Eng. Joseph K. Njoroge joined the Board in line with their appointments under the 2010 Constitution. On behalf of the entire Board, I would like to thank those who left for the considerable contribution they have made to KETRACO over the years and also welcome the new members appointed to the Board. I once again express my sincere gratitude and appreciation to the Board of Directors, management, staff, the Government, particularly the Ministry of Energy & Petroleum and The National Treasury, and our development and business partners for their continued support which enabled KETRACO to achieve major milestones during the period under review. I look forward to your continued support. Dr. Kenneth Sigilai CHAIRMAN 2 nd May,

20 MUKHTASARI WA MWENYEKITI Karibu katika ripoti ya mwaka na taarifa za fedha zilizokaguliwa kwa mwaka wa fedha ulioishia Juni 2013 ya shirika la Kenya Electricity Transmission Company (KETRACO). Hii ni ripoti yangu ya kwanza kuwasilisha kwa wanahisa wa KET- RACO tangu kuteuliwa kwangu kama Mwenyekiti wa Bodi kuanzia Januari 10, Nachukua kifunguo hiki ambacho nimekabidhiwa na mtangulizi wangu kama changamoto na naahidi wadau wetu kwamba miaka ijayo, kampuni itafanikisha matarajio ya wateja na mwanahisa wetu. Mapitio ya Uchumi Uchumi wa Kenya ulikuwa kwa kasi ya chini katika mwaka wa 2013 kuelekezea kwa pato la taifa (GDP) ya 4.6 % ikilinganishwa na 4.4% ya mwaka Utekelezaji huu ulitokana na mazingira tulivu ya uchumi kwa sehemu kubwa ya mwaka; mfumuko wa bei ya chini na imara ulisaidia kuboresha uzalishaji wa vyakula, bei ya chini ya mafuta ya kimataifa na kupunguka kwa gharama za umeme; maendeleo ya miundombinu na sekta ya ujenzi. Hata hivyo, chini ya makadirio ya ukuaji wa uchumi ulitokana na (i) mvua ya kiwango cha chini kilichoathiri sekta ya kilimo ambayo ina mchango mkubwa katika pato la taifa yetu; (ii) kupunguka kwa mauzo ya nje na kusababisha urari mbaya wa biashara; (iii) viwango vya ribavya juu; (iv) kupunguza matumizi ya Serikali, katika kipindi cha mpito; (v) hofu ya kufanya biashara hadi uchaguzi mkuu wa 2013; na (vi) wasiwasi wa ukosefu wa usalama. Matokeo ya Uchumi ya 2014 Utulivu wa uchumi mkuu ulioshuhudiwa mwaka wa 2013 uliendelea katika robo ya kwanza ya 2014 na kuna uwezekano wa kuwa hali hii itaendelea hadi mwakani. Utekelezaji wa bajeti ya maendeleo katika Kaunti unatarajiwa kuchochea ukuaji wa zaidi wa uchumi. Matumizi ya kibinafsi pia ina uwezekano wa kuboresha kutokana na kuimarishwa kwa viwango vya riba vya chini na mfumuko wa bei ya serikali. Uvumbuzi wa hivi karibuni wa mafuta ya petroli na gesi asilia una wezekano wa kusababisha uwekezaji zaidi wa kigeni wa moja kwa moja. Utendaji sekta ya viwanda yanatarajiwa kudumisha ukuaji sasa njia yake kutokana na ukuaji chanya ndani ya kanda. Hali kadhalika, sekta ya huduma za fedha ina uwezekano wa kudumisha kasi yake mwaka 2014 hasa kwa sababu ya utendaji, kuimarishwa na ubunifu katika sekta mbalimbali. Uwekezaji katika sekta ya ujenzi ina uwezekano wa kubaki imara dhidi ya historia ya viwango vya riba imara ikiwa ni pamoja na miradi ya miundombinu ya serikali na ushujaa wa sekta ya kibinafsi hasa katika maendeleo ya mali isiyohamishika. Mapitio ya Sekta Ndogo ya Umeme Kama sekta mbalimbali nchini zina jitahidi kufikia shabaha za Ruwaza ya 2030, KETRACO tunafuraha kutoa taarifa kwamba tunaendelea kutekeleza miradi 14 ya Ruwaza ya 2030 nchini kote. Naamini kuwa tuna miradi mingi zaidi inayotekelezwa na shirika moja. 18

21 Hiyo ni wajibu ambao tunafuraha kubeba na kutekeleza. Upatikanaji wa umeme kwa bei nafuu ni mandhari kwamba serikali mpya imechukua nia moja, na kuahidi kushukisha chini gharama ya sasa na kuhakikisha kufikia zaidi ya 30% ya idadi ya watu. Ni muhimu kufahamu kwamba KET- RACO imeanzisha mpango kabambe wa kujenga laini mpya za usambazaji wa umeme yenye urefu wa 4600km, vituo vipya vya umeme 44 na kupanua vituo vya umeme 26 kufikia Mpango huu utashughulikia changamoto zinazondelea kuwa pigo katika sekta ya umeme nchini. Laini ya kusambaza umeme ya Rabai- Malindi- Garsen- Lamu Katika robo ya mwisho wa mwaka, serikali ilizindua mradi wa 5000+MW ambayo ni juu zaidi ya kilomita 4600 ya laini za usambazaji ya umeme yenye volti ya juu ambayo tumekuwa tukitekeleza katika miaka minee iliyopita ambayo tumekuwa tukihudumu. Tunafuraha kupewa moja ya majukumu makubwa ili kuhakikisha kwamba Gridi ya Taifa inafikia maeneo mapya, laini zilizopo zinaongezwa nguvu na uokoaji kutoka kwa miradi ya sasa na inayopendekezwa inatekelezwa mara moja. Mpango kabambe wa kuongeza uzalishaji wa ziada wa 5000+MW kufikia 2017 utawezesha KETRACO kupewa jukumu kubwa la kujenga kilomita 948 za ziada na vituo vya umeme katika maeneo tufuti nchini ili kuokoa umeme huu. Mpango huu utashughulikia changamoto ambazo zimekuwa pigo katika sekta ya umeme nchini. Serikali kwa niaba ya KETRACO, imeendelea kutafuta na kupata fedha ya masharti nafuu kutoka kwa washirika wetu wa maendeleo ambayo inaongezea fedha kutoka kwa serikali ili kuwezesha upanuzi huu. Aidha, Kampuni inafanya kazi na kampuni za kikanda za umeme ili kuharakisha uunganishaji ili kupata ugavi nafuu wa umeme kwa njia ya biashara ya kikanda. Mapitio ya Utendaji Katika mwaka husika, KETRACO ilikamilisha laini ya kusambaza umeme ya 33km Mumias - Rangala, laini ya kusambaza umeme ya 17km yenye mizunguko miwili ya sehemu ya Kilimambogo - Thika na laini ya kusambaza umeme ya 20km ya shemu ya Thika - Nyaga. Mapato yetu ya jumla katika kipindi cha mwaka yalifikia Kshs.1,265 milioni ikilinganishwa na Kshs.1, 276 milioni ya mwaka wa 2011/ 2012, wakati jumla ya gharama za uendeshaji kwa kipindi ilikuwa milioni Kshs.774 ikilinganishwa na Kshs.1,218 milioni kwa mwaka uliopita. Pamoja na jumla ya gharama za uendeshaji kwa mwaka huu ni kutoa kwa ajili ya madeni ya mashaka kiasi cha milioni Kshs.47 ilioashiriwa kwa kodi ya kupitishia umeme ya shirika la Kenya Power, ambayo bado inapitiwa. Ziada ya mwaka kabla ya kodi ilikuwa Kshs.491milioni wakati ziada ya ilikuwa Ksh 291 milioni. Hii inalinganishwa na ziada kabla ya kodi ya Kshs.58 milioni na ziada halisi ya Kshs.34 milioni katika mwaka wa fedha wa 2011/2012. Msingi mali iliongezeka kutoka Kshs.28,743 milioni mwaka wa 2012 hadi Kshs.43,688 milioni mwaka huu. Hii ni ongezeko ya 52% ambayo ni pongezi. 19

22 Siku zijazo Kampuni imeweka mpango wa kufafanua ili kuharakisha upanuzi wa usambazaji wa miundombinu ya umeme katika muda mfupi na mrefu. Katika mwaka wa fedha wa 2013/2014 KETRACO inakusudia kukamilisha laini za kusambaza umeme za 328km 220kV Rabai - Malindi -Garsen - Lamu, 77km 132kV sehemu ya Thika Githambo na kukamilisha kituo cha umeme cha 220kV cha Rabai. Katika huo mwaka wa fedha, Kampuni inatarajia kuanza ujenzi wa laini za kusambaza umeme zenye umbali wa 700km chini ya mpango wa uboreshaji wa Kenya Power Transmission System na miradi iliyofadhiliwa na India Exim. KETRACO pia itatafuta wakandarasi kwa ajili ya vituo vya umeme vya Mariakani, Isinya na laini ya kusambaza umeme ya Menengai - Soilo. Miradi zaidi ya kusambaza umeme ikikamika, tunatarajia kuongeza kiasi kikubwa cha umeme itakayopitia katika mtandao wetu, yenye athari ya juu ya mauzo yetu. Pamoja na msaada wa Serikali yetu, washirika wa maendeleo na wadau wengine wote, miradi ya miundombinu iliyopangwa itatekelezwa kwa mafanikio ambayo itasaidia katika kufikia malengo ya Ruwaza ya Shukrani Katika mwaka uliopita, kumekuwa na idadi ya mabadiliko ya Bodi. Bwana Justus Kageenu aliwacha kuwa Mwenyekiti wa Bodi. Bwana Patrick M. Nyoike na Bwana Joseph K. Kinyua pia walisita kuwa katika Bodi baada ya kusita kuwa makatibu. Katika nafasi zao Bwana Henry Rotich na Mhandisi Joseph K. Njoroge walijiunga na Bodi kulingana na Katiba Mpya ya Kwa niaba ya Halmashauri nzima, ningependa kuwashukuru wote kwa mchango mkubwa waliofanyia KETRACO na kuwakaribisha wanachama wapya walioteuliwa katika Bodi. Kwa mara nyingine tena natoa shukrani zangu za dhati na shukrani kwa Bodi ya sasa ya Wakurugenzi, wasimamizi, wafanyakazi, Serikali, hasa Wizara ya Nishati na Petroli na ya Hazina ya Taifa, na washirika wetu wa maendeleo na wa biashara mbalimbali kwa ajili ya kuendeleza misaada yao ambayo imewezesha KETRACO kufikia malengo katika kipindi hiki. Natarajia ushaikika huo kuendelea siku zijazo. Dkt Kenneth Sigilai Mwenyekiti Mei 2,

23 REPORT OF THE MANAGING DIRECTOR & CEO FOR THE FINANCIAL YEAR ENDED 30 TH JUNE 2013 national, Inc. to undertake Cost of Service Study, the findings of which have far-reaching implications on the operations of the Company also marked a major milestone in the sector. Further and more importantly, we cannot fail to give special attention to the current bold initiative by the Jubilee Government to add 5,000+MW of electricity generation to the grid by KETRACO will play a very key role in this endeavour by implementing the necessary transmission infrastructure to evacuate the envisaged energy to the load centres for distribution to customers. During the year under review, KETRACO continued implementation of the accelerated programme to extend the electricity transmission grid throughout the Country in order to increase and improve power transmission capacity and reliability of supply guided by its core values of customer focus, team work, creativity, innovation, integrity and professionalism. OVERVIEW Over the last few years, the Company has intensified its operations aimed at strengthening and extending the national power grid. It is expected that this will enhance quality, reliability and security of power supply in the Country in addition to increased electricity access. The Company has continued to diligently play its rightful role in transforming Kenya s economy. It is therefore in this context that I take this great opportunity to present an overview of KETRACO s performance for the financial year ending June In the financial year 2012/2013, there were a number of positive developments in the energy sector. These include the review of both the Energy Policy and the Energy Act to align the energy sector and electricity sub-sector operations with the Constitution of Kenya 2010 of reports of key consultations. The engagement of consultants, CPCS Transcom International to undertake a Power Market Study and SNC Lavalin Inter- The Company also made other improvements during the year, which included enhanced human resource capacity, provision of better work environment, strengthened ICT infrastructure, review of enterprise risk management (ERM) framework and risk assessment, review of medium and long term plans and improvement of service delivery mechanisms. With a goal of contributing towards realization of Kenya Vision 2030, KETRACO continues to implement its mandate, which is to plan, design, construct, operate and maintain new high voltage electricity transmission infrastructure that form the backbone of the national transmission grid. In this regard, the Company has made great strides towards achieving its objectives since inception in December As at June 2009, the lengths of high voltage electricity transmission lines were 1,331kms for 220kV and 2,112kms for 132kV, totalling 3,443kms. With the Company s contribution, this scenario is bound to change drastically when the on-going and planned strategic transmission infrastructure projects will be commissioned within the next three years. 21

24 During the period under review, the Company added 141km of electricity transmission infrastructure to the national grid. However, cumulatively since inception, the Company has completed additional 756kms of 132kV and 220kV lines as detailed in Table 1 below:- Table 1: Length of Completed HV Transmission Lines (Km) Transmission Line Length (KM) Commissioning Date 1 *Sondu Miriu Kisumu 132kV 50 July Chemosit Kisii 132kV line 62 March Rabai Galu 132kV line 48 March Kamburu Meru 132kV line 122 Sept Sang oro Sondu 132kV line 5 June Mumias-Rangala 132kV line 34 July Kilimambogo-Thika-Githambo 132kV line 77 November Thika-Gatundu (Nyaga) 132kV line 30 June 2013 **Rabai-Malindi-Garsen-Lamu March kV line Total Length (KM) 756 *The Sondu Miriu-Kisumu line was implemented by KenGen and handed over to KETRACO. ** 324km out of the 328km Rabai-Malindi-Garsen-Lamu was complete by June The remaining section was delayed by flooding of River Sabaki and River Tana which together with final sub-stations works was finally energized in March The contribution of the Company towards development of the National Grid is depicted in Figure 1 below. Figure 1: Length of Completed HV Transmission Lines (Km) length of about 4,900kms of transmission lines comprising approximately 2,300km of 132kV, 570km of 220kV and 1,440km of 400kV AC lines as well as 612km of 500kV HVDC line between 2013 and The identified and committed transmission lines, substations and regional interconnection projects are at various stages of project development. The mediumterm transmission development plan is very critical for the power system improvement, grid expansion and power evacuation from committed generation plants. This is also in line with the second medium-term plan of the Vision 2030 development objectives. It is estimated that the total investment cost of the committed projects is about US$ 2 billion at current prices. It is projected that by the year 2033 KETRACO will develop about 11,230kms of new transmission lines at an estimated present value cost of US$ 3.55 billion. The new transmission line projects are aimed at developing a robust grid system in order to improve quality and reliability of electricity supply throughout the Country and ensure adequate evacuation capacity that will enhance access, affordability and security of electricity supply in Kenya. Considering the planned capacity development programmes for the Company, the infrastructure development will strategically put KETRACO in a position to effectively play the envisaged roles of power system and market operations in the country and the region. The planned length of transmission lines by voltage level are shown in Figure 2 below. Figure 2: Length of Planned Transmission Lines by the year 2033(Km) Length (km Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Length (km Year 220kV 132kV Total 2000 Based on the national Least Cost Power Development Plan (LCPDP), KETRACO is currently implementing several priority projects with a total 0 Year kV 220kV 400kV 500kV Total 22

25 PROJECTS IMPLEMENTATION During the financial year under review, construction works for the following transmission line projects were on-going: (i) 77km 132kV Kilimambogo Thika Githambo; (ii) 30km 132kV Thika Gatundu (Nyaga); (iii) 328 km 220kV Rabai Malindi Garsen Lamu; and (iv) 482km 400/220kV Mombasa Nairobi. The first three projects were nearly completed by June Construction of the Mombasa-Nairobi line progressed despite immense wayleaves acquisition challenges but it is expected to be completed by June The Company also commenced construction of the following projects: - (i) 354km 132kV Kenya Electricity Expansion Programme (KEEP): Kindaruma Mwingi Garissa, Eldoret - Kitale and Kisii - Awendo all which were handed over to the line and substation contractors. (ii) 431km, 132kV Power Transmission Improvement Projects: Ishiara - Kieni; Nanyuki - Nyahururu; Lessos - Kabarnet; Olkaria - Narok; Bomet - Sotik; and Mwingi Kitui Wote -Sultan Hamud lines and associated substations. (iii) 100km, 400kV Nairobi Ring: Suswa-Isinya double circuit transmission line and substations at Isinya, Athi River, Ngong and KomaRock and extension of Dandora substation. (iv) 25km, 220kV Olkaria I - Suswa and 25km 220kV Olkaria IV - Suswa double circuit lines, which are implemented through KenGen. Also during the year, Engineering, Procurement and Construction (EPC) contracts were awarded for the following transmission line projects and associated substations: (i) 430km, 400kV Loiyangalani-Suswa; (ii) 96km, 132kV Meru Isiolo Nanyuki; (iii) 127km, 400kV Lessos-Tororo (Kenya-Uganda interconnector); (iv) 153km, 132kV Machakos Konza Kajiado Namanga; (v) 90km, 220kV Turkwel-Ortum-Kitale. In addition, engineering supervision bid documents were prepared and contracts were awarded for the following projects: (i) 300km, 400/220kV Olkaria Lessos Kisumu double circuit Line and substation works at Olkaria, Lessos & Kisumu; (ii) 612km, 500kV HVDC Eastern Electricity Highway (Ethiopia Kenya interconnector) bipolar line with DC/AC convertor substation and 400/220kV substation. Feasibility studies were completed for the following projects: (i) 50km 132kV Meru Maua; (ii) 148km 132kV Nyahururu Maralal; (iii) 240km 220kV Garsen -Hola Garissa; (iv) 330km 132kV Garissa Wajir; (v) 50km 132kV Awendo Isabenia; (vi) 60km 132kV Galu - Lunga Lunga; (vii) 40km 132kV Ishiara Chogoria; (viii) 20km 400kV Menengai Rongai; (ix) 100km 400kV Kenya-Tanzania Interconnector (with detailed design and tender documents prepared). Moreover, feasibility studies for twenty new projects were started. The implementation details for the various projects are given below:- I. System Strengthening Projects The system strengthening and capacity enhancement projects will improve transfer of electrical energy capacity and address the challenge of low voltages, high transmission losses, unreliability of supply and network security. These projects include:- 482km, 400/220kV Mombasa - Nairobi line This is a 482km, 400/220kV double circuit line from Rabai substation to Embakasi with power capacity of 1,500MW. It aims at bridging the gap between the supply of power in the Coastal Region and demand in Nairobi and the rest of the Country. Construction of the line commenced in December 2010 and currently tower erection and conductor stringing are on-going. It is projected to be completed by June When completed, the project will facilitate stable and reliable power supply to other intermediate towns between Mombasa and Nairobi especially satellite towns 23

26 like Isinya, Athi River, Kitengela, Kisaju, and Mariakani through expansion of the substations and distribution network resulting in new opportunities for investment. Besides these towns, the project will supply quality power to the upcoming cities, cement, oil refineries, steel and other industries within Machakos and Kajiado Counties; creating more job opportunities for Kenyan citizens. This transmission line will also facilitate efficient transportation of both goods and passengers by providing electricity to power the planned modern electric trains. The proposed Konza Techno city (Africa s Silicon Savannah) and the recently inaugurated Machakos County city will be major beneficiaries of the project since it will provide the necessary power required for the growth and development of the cities. The fast growing ICT sector in the Country will enjoy reliable connectivity at lower costs that will be provided by the fibre optic cable installed on the transmission line. This will in turn improve ICT services such as internet connectivity, secure e-banking among, others. On the regional arena, Kenya and its neighbours; Uganda, Rwanda, DR Congo, Burundi, South Sudan and Tanzania will extensively benefit from this project by reduction of road transport and damage of roads owing to establishment of new power plants at the coast and efficient pumping of fuel through pipelines. Regional interconnection will harness economic power surplus available in different countries throughout the year. 328km, 220kV Rabai Malindi Garsen - Lamu line This project involves construction of the 328km 220kV single circuit transmission line and substations at Malindi, Garsen and Lamu. The line with a 230MW rating is funded by Exim Bank of China & GoK at a total cost of Kshs.9.5 billion. The contractor for the project is CAMCE of China and the engineering consultant is Parsons Brinckerhoff of UK. It started in December 2010 and construction of the project was completed in March 2014 and the Rabai-Malindi section was energized. The project benefits include the reduction of power losses between Kilifi and Malindi currently served by a low voltage line, displace the costly diesel plant at Lamu, supply power to the planned Lamu port, the proposed Kilifi resort city and the part of the LAPSSET Ongoing construction works at Lamu Substation in March

27 corridor. Beneficiaries in the agricultural sector will also include entities like the Tana River Development Authority irrigation schemes, the National Cereals and Produce Board (NCPB) grain stores at Garsen and the proposed sugar factories in Tana River County since reliable power will result in expanded irrigation, processing and storage of produce facilities. The line will help in expanding tourism and other cottage industries in the North Coast. Nairobi Ring and Associated Substations This project involves construction of a 100km 400kV double circuit line from Suswa substation to Isinya substation rated at 1700MW, 40km 220kV Suswa Ngong line and five 220kV substations at Suswa, Ngong, Isinya, Athi River & Komarock. The contractors for the various components of the project are Jyoti Structures (India), Siemens (France) and Iberdrola (Spain). The consultants are Power Engineers (South Africa) and KEMA (Netherlands). The project is under construction and is expected to be completed in November The project is being financed by AFD, EIB & GoK at a total cost of Kshs.16.9 billion. On its part, the Nairobi ring project will offer more than one alternative of supplying power into the Nairobi Metropolitan region. The increase in reliability of power supply will create a favourable climate for investment and growth in the capital city and surrounding areas. The Suswa Isinya line portion will be a central piece in the transfer of power to/from Ethiopia, Tanzania and Uganda. 300km, 220/400kV Olkaria-Lessos-Kisumu line This project involves construction of a 300km line consisting of 400kV double circuit line from Olkaria geothermal power plant to Lessos, 220kV double circuit line from Lessos to Kisumu, a new 200kV substation in Kisumu and and extension of the existing Olkaria and Lessos substations. The line to Lessos will have a rating of 1200 MW while the line to Kisumu will have a rating of 500MW. The project is funded by JICA & GoK at a total cost of Kshs.13.2 billion and is expected to be completed in Ms Agnes Ongadi, Chief Manager Human Capital and Administration, planting a Coconut seedling as part of CSR in conjunction with KCDA in Kilifi. 25

28 The Olkaria-Lessos-Kisumu project will help strengthen the link between the eastern and western parts of the grid. The project will satisfy the rapidly increasing power demand of the counties within the Western and North rift regions by providing bulk energy transfer to these regions from the Olkaria geothermal field, this will eventually lead to the retirement of the remaining 30MW of emergency power at Muhoroni. Several Agricultural and industrial facilities like the tea factories in Nandi County, the factories within the Sugar belt (Miwani - Kibos) regions, the Kenya Agricultural Research Institute Station in Kibos, and the manufacturing industries located within Kisumu County will benefit immensely from the expected reliable power. II. Power Evacuation Projects The Company is implementing several projects targeting to evacuate power from various generation stations to several load centres. These projects are discussed below: 430km, 400kV Loiyangalani-Suswa line tract for construction of the substations was signed with Siemens T&D. KEMA (Netherlands) are the engineering consultants for the project. It is expected to be completed in The Loiyangalani substation and Loiyangalani Suswa line is funded by the Spanish Government & GoK at a total cost of Kshs.16.5 billion, with the Spanish financing being Kshs 12 billion while GoK funding is Ksh 4.5 billion. 2no. 25km, 220kV Olkaria- Suswa lines This project involves construction of two 25km 220kV double circuit lines from the new 280MW Olkaria IV & I, additional Unit Geothermal power plants to Suswa substation and it is expected to be completed in July The lines have a combined capacity of 1000MW. The lines are financed by JICA, AFD, EIB and GoK at a cost of Kshs. 0.9 billion. The contractor for the line is KEC International from India while the engineering consultants are SKM. This project is implemented through KenGen. The project entails construction of 430km 400kV double circuit line from the Lake Turkana Wind plant in Loiyangalani to Suswa substation. The line is rated at 1300MW and will be used to evacuate electricity from the 300MW Lake Turkana Wind Power plant. The line will provide the necessary capacity to evacuate power from the future power plants to be located along the Rift Valley geothermal fields and wind farms in Northern Kenya (Marsabit).The EPC Contract for the line was signed with Ms. Isolux Ingeniera of Spain while the con- Ongoing construction of cable tray holders at Olkaria I in Naivasha 26

29 5km, 132kV Sangoro-Sondu line This is a 5km 132kV single circuit line that links 21.2MW Sangoro power station to Sondu Miriu power station. The line was commissioned in March The project was funded by JICA & GoK at a cost of Kshs.1.2 billion. The project was also implemented through KenGen. III. Regional Interconnection Projects In order to enhance regional integration and promote regional power flows, the Company is implementing key regional power interconnection projects. The main aim is to stabilize power supply and support power trade between neighbouring countries. These projects include: 127km, 400kV Lessos-Tororo line (Kenya-Uganda Interconnector) This project involves construction of 127km 400kV double circuit line from Lessos substation in Kenya to Tororo in Uganda. The line capacity is rated at 1200MW and is expected to be completed in June The consultant for the project is RSW International (Aecom) from Canada and the contractor is M/S Instalaciones Inabensa of Spain. This interconnector is part of the Nile Equatorial Lakes Subsidiary Action Program (NELSAP) that links the electricity network in Kenya to Uganda, Rwanda, Burundi and Eastern part of D.R. Congo. The project is funded by AfDB & GoK at a total cost of Kshs.4.9 billion. The line will provide opportunities for power trade besides offering stability of the national grids in this region. 612km Eastern Electricity Highway Project (Ethiopia-Kenya Interconnector) The Ethiopia-Kenya interconnector, also known as the Eastern Electricity Highway project, will link Kenya and Ethiopia power systems. It involves construction of a 612km 500kV HVDC Bipolar line from Suswa substation to Ethiopia and Convertor stations at both ends. This line will have a capacity to transfer 2000MW between the two countries. The planned integration of the power networks will accelerate the development of regional power trade that will help meet increasing electricity demand and reduce the cost of electricity to the participating countries. The line once completed will also allow Kenya and Ethiopia to exploit the large potential of diverse energy resources available for power generation which will enhance security of supply and reduce costs. Also, because the countries will transmit surplus energy generated largely from renewable energy resources, the interconnections will result in improved environmental quality from the reduced generation from fossil fuels. So far the project engineering supervision consultant, M/s Lahmeyer International of Germany, has been procured and NEMA licence has been acquired. Procurement of the EPC contractor is underway and the project is expected to be completed in June The project is funded by World Bank, AfDB, AFD & GoK at a cost of Kshs.63.2 billion. 93km, 400kV Kenya-Tanzania Interconnector This project is a component of the wider Kenya Tanzania-Zambia interconnector that will link the Kenya network to the South African Power Pool. It entails construction of 400kV double circuit transmission line. The total length of the proposed Isinya Arusha Singida line is km with 93.1 km in Kenya and km in Tanzania. The AfDB has confirmed interest in financing the construction of the project a total cost of Kshs.4.8 billion. This line will provide opportunities for power trade in the East African region and connection to the Southern Power Pool. The project feasibility study, detailed design and tender documents have been completed. The project is expected to be completed in IV. Electricity Access Projects The projects grouped in this category fall under the Energy Access Scale-Up Program and their main objective is to increase electricity access and address the challenge of low penetration and low connectivity. The projects under this program are as follows: (a) Transmission System Expansion projects These projects are funded by the KBC Bank of Belgium and the Government of Kenya. 27

30 132kV Kilimambogo Thika - Githambo and Thika Gatundu (Nyaga) line The project involved the construction of two lines, a 17km 132kV double circuit line from the Tee-off at Kilimambogo to Thika (Mangu) substation, followed by a 10km double circuit section before the two circuit split into a 50km single circuit line to Githambo and a 20km single circuit line to Gatundu. Each line has a rating of 73MW. The project included the construction of Thika, Githambo and Gatundu substations. Gatundu line and substation were commissioned in December, 2012 while the line to Githambo was commissioned in September The project was funded by KBC Bank of Belgium & GoK at a total cost of Kshs.3.6 billion. The project will ensure that Thika town, large parts of both Kiambu county and Muranga county have reliable electricity supply thus spurring growth in the Industrial and Agricultural sector. 96km, 132kV Nanyuki Isiolo - Meru line The project which involves construction of the 96km 132kV single circuit line from the Nanyuki substation to Isiolo and Meru is expected to be completed in December The project also involves the construction of a new substation at Isiolo and the extension of existing substations at Nanyuki and Meru. The line has a rating of 73MW. The project is funded by KCB Bank of Belgium and GoK at a cost of Kshs.2.5 billion. The contractor for the project is CG Holdings of Belgium. Besides offering an alternative line for supply of electricity from two different hydropower stations, the line will provide reliable supply of electricity to Isiolo city current being developed as a LAPSSET resort city. (b) Transmission System Improvement Project 34km, 132kV Mumias - Rangala line The 34km 132kV single circuit line from the Mumias to Rangala, with a power transfer capacity of 73MW, was commissioned in August, The project which also includes the construction of Rangala substation and extension of Mumias substation was fully funded by GoK at a cost of Kshs. 1.2 billion. The Agricultural sector in Mumias region and parts of northern Siaya County will greatly benefit from the supply of electricity. (c) Kenya Electricity Expansion Program (KEEP) The KEEP is an electricity expansion initiative funded by the World Bank and the Government of Kenya. KEEP covers generation, transmission and distribution in the energy sector. The transmission component consists of 354km of 132kV transmission lines and their associated sub-stations comprising of the following projects:- 250km, 132kV Kindaruma-Mwingi-Garissa line The project involves construction of a 132kV single circuit line from Kindaruma to Garissa via Mwingi with new substations at Mwingi and Garissa and extension works at the existing Kindaruma substation. The project is funded by World Bank and GoK at a cost of Kshs.3.4 billion. The line construction contract was awarded to Tata Projects Ltd (India) and for substations to KEC International Ltd (India). The project is expected to be completed by June Besides improving electricity access to rural population, this first high voltage transmission line in Mwingi and Garissa county will add benefits including displacement of expensive off-grid diesel generators in Garissa and evacuation of power to the national grid from the proposed Feed in Tariff generation projects in northern parts Kenya. 60km, 132kV Eldoret-Kitale line This project entails construction of 132kV single circuit transmission line from Eldoret to Kitale and a new substation at Kitale and extension of the existing Eldoret substation. The contract for construction of substations was awarded to M/s ABB South Africa (Pty) Ltd and for the line awarded to Tata Projects Ltd (India). The project is financed by World Bank and GoK at a cost of Kshs.1.6 billion and is expected to be complete by June, The project will greatly benefit the agricultural sector in the country bread basket and provide electricity access to many households. 44km, 132kV Kisii-Awendo line This project entails construction of a 132kV single circuit transmission line from Kisii to Awendo, new substation at Awendo and extends the existing Kisii substation. The Contractor for construction of the substation is M/s ABB South Africa (Pty) Ltd and for the line is Tata Projects Ltd (India). The project 28

31 is expected to be completed by June 2014 and is financed by World Bank and GoK at a cost of Kshs.1.4 billion. The project is going to provide additional reliable electricity access to the residents in that area and provide an evacuation route of power from the proposed Sony Sugar Company co-generation plant to the national grid. (d) Kenya Power Transmission System Improvement Programme (KPTSIP) The Company is also implementing the Kenya Power Transmission System Improvement Programme (KPTSIP), which comprises of six lines discussed below with a total length of 431km and 14 associated substations. The lines will each have a 73MW rating. The KPTSIP programme is funded by AfDB and GoK at a total cost of Kshs.8.1 billion. The engineering consultants are SMEC International, the line contractors are Jyoti Structures Limited and the substation sontractors are CAMCE (China) Engineering Company. The projects detailed design for substation and transmission line is ongoing and the project is expected to be commissioned by September The lines will increase electricity access in Kabarnet, Nyahururu/Rumuruti, Narok, Sotik, Bomet, Kitui, Wote, Sultan Hamud, Ishiara and Kieni areas. Availability of reliable electricity supply will transform the areas into attractive locations for agro-based and general industries thus going a long way towards supporting the devolved governments. 65km, 132kV Lessos - Kabarnet line The 65km transmission line project will involve construction of a 132kV single circuit transmission line from Lessos to Kabarnet, a new 132/33kV substation at Kabarnet and extension of the existing Lessos substation. 79km, 132kV Nanyuki Nyahururu (Rumuruti) line This project involves the construction of a 79km 132kV single circuit transmission line from Nanyuki to Nyahururu (Rumuruti), a new 132/33kV substation at Nyahururu and extension of the existing Nanyuki substation. 68km, 132kV Olkaria - Narok line The 68km single circuit Olkaria to Narok line entails construction of a 132kV single circuit transmission line, a new 132/33kV substation at Narok and an extension of the existing Olkaria substation. 33km, 132kV Sotik - Bomet line The 33km Bomet to Sotik line involves constructing a 132kV single circuit transmission line and 132/33kV substation at Bomet and Sotik. 153km, 132kV Mwingi Kitui - Wote - Sultan Hamud line This involves constructing of a 153km 132kV single circuit transmission line from Mwingi through Kitui, Wote to Sultan Hamud with new 132/33kV substations at Kitui, Wote and Sultan Hamud, and extension of the Mwingi substation. 33km, 132kV Ishiara - Kieni line The transmission line project scope includes construction of a 33km 132kV single circuit transmission line from Ishiara to Kieni, a 132/33kV substation at Kieni and switchgear at Ishiara. V. Other Ongoing Projects The Company is also implementing the following projects that are at different stages: (i) EXIM Bank of India and GoK funded Projects: a) Turkwel Ortum Kitale line; The 90km, 220kV single circuit line from the Turkwel power plant to Ortum and Kitale; with a rating of 250MW. The project includes one new substation that will be constructed in Ortum and the Kitale and Turkwel substations expanded. EPC contracts for the line and substations have been awarded and the project is expected to be completed by December In addition to providing an alternative power supply path to Kitale, it will mainly supply power to the proposed Cement industry at Ortum. b)machakos Konza Kajiado Namanga line; The 153km, 132kV single circuit line from Machakos to Konza, Kajiado and Namanga; with a rating of 73MW. The project includes four new substations that will be constructed in Machakos, Konza, Kajiado and 29

32 Namanga. EPC contracts for the line and substations have been awarded and the project is expected to be completed by December The project will strengthen the existing power network in addition to increasing access to electricity in Machakos, Konza, Kajiado and Namanga and their environs. Reliable supply of electricity will result in rapid growth in the Meat and Meat-products industries in Kajiado country. The first phase of the Konza ICT city will be supplied electricity using this line. The total 243km transmission lines and associated substations will be funded by India Exim Bank & GoK at a total cost of Kshs.6.3 billion. The India Exim Bank is providing US$ 62 million. The projects are expected to be commissioned in September (ii) Sondu Homa Bay Awendo line: The KBC Bank of Belgium & GoK funded the 100km 132kV single circuit line from the Sondu power plant to Homa Bay and Kitale; with a rating of 72MW which will include one new substation at Homa Bay and extension of Sondu and Awendo substations. The contractor for the project is CG Holdings of Belgium and the project is expected to be completed in The project is estimated to cost Kshs.2.3 billion. It aims at strengthening the existing power network in the Western Region of Kenya and increasing access to electricity in Homa Bay County for the development of fish industry. (iii) Mariakani 400/220KV Substation: The project involves the construction of a 4x200MVA substation. The project cost is Kshs 2.7 billion and is funded by AfDB. Procurement of the contractor is underway and the expected completion date is August (iv) Ethiopia Kenya reinforcement: The project involves the construction of a 2x450MVA substation at Isinya and capacitor banks at Athi River and Nairobi North. The project is funded by the World Bank and is expected to cost Kshs. 4.5 billion. The Expected completion date is September VI. Proposed Transmission line projects for 5,000+MW fast tracked generation a) Menengai-Soilo: 13km, 132kV double circuit line with 220/132kV 200MVA substation at Soilo. The project is fully financed by Government at an estimated cost of Kshs. 0.8 billion. EPC contract has been awarded with a targeted completion date of December 2014 to evacuate power from the 90MW Menengai Geothermal Power. b) Menengai- Rongai: 30km, 400kV double circuit line with 400/220kV 200MVA substations at Menengai and Rongai. The estimated cost is Kshs. 3.2 billion with a targeted completion date of June 2016 to evacuate power from the 400MW Menengai Geothermal Power. c) Silali- Rongai: 150km, 400kV double circuit line with 400/11 kv 350MVA substation at Silali. The estimated cost is Kshs. 5.6 billion with a targeted completion date of June 2016 to evacuate power from the 200MW Silali Geothermal Power. d) Dongo Kundu- Mariakani: 50km, 400kV double circuit line. The estimated cost is Kshs. 4.0 billion with a targeted completion date of July 2015 to evacuate power from the 700MW LNG Power. e) Lamu - Kitui-Nairobi East: 520km, 400kV double circuit line. The estimated cost is Kshs billion with a targeted completion date of December 2016 to evacuate power from the 960MW Kitui and 960MW lamu coal power plants and additional capacity. f) Isinya- Nairobi East: 75km, 400kV double circuit line 400/220kV 350MVA substation at Nairobi East. The estimated cost is Kshs. 4.3 billion with a targeted completion date of October 2016 to evacuate power from the additional capacity. VII. Projects requiring financing KETRACO has identified additional transmission lines projects that require financing. Some of the lines are intended to strengthen the power networks in Maua, Maralal, Migori/Isabenia, Lunga Lunga and Chogoria. Others will facilitate connection of the isolated power 30

33 stations (i.e Hola, Bura, Habaswen and Wajir) to the National Grid and increase electricity access aimed at enhancing development in the regions. These projects include the following: a) Meru - Maua line; The 50km, 132kV single circuit line with a rating of 73MW will also involve the construction of one new substation at Maua and extension of Meru substation. The total construction cost and way leave acquisition cost is estimated at Kshs.1.4 billion. The line will benefit the agricultural industry in general. b) Rumuruti - Maralal line; The 148km, 132kV single circuit line with a rating of 73MW with construction of one new substation at Maralal and extension of Nyahururu substation. The total construction cost and wayleave acquisition cost is estimated at Kshs.2.1 billion. Beneficiaries of the line will include large scale ranch owners and proposed solar generation in the area around Maralal. c) Awendo Migori/Isabenia line; The 50km, 132kV single circuit line with a rating of 73MW will also involve the construction of one new substation at Migori/Isabenia and extension of Awendo substation. The total construction cost and wayleave acquisition cost is estimated at Kshs.14 billion. The line will result in growth in the sugar industry and also offer an opportunity for power trade with Northern Tanzania. d) Garsen Hola Bura - Garissa line; The 240km, 220kV single circuit line with a rating of 250MW will also involve the construction of two new substations at Hola and Bura and extension of Garsen and Garissa substations. The total construction cost and wayleave acquisition cost is estimated at Kshs.4.2 billion. The line runs parallel to Tana River and therefore will open up areas for irrigation, agricultural product industries and reliable storage. e) Galu Lunga Lunga line; The 60km, 132kV single circuit line with a rating of 73MW will also involve the construction of one new substation at Lunga Lunga and extension of Galu substation. The total construction cost and wayleave acquisition cost is estimated at Kshs.1.6 billion. The line will benefit the mining industry, sugar industry, cashew-nut industry besides being available for power trade with Northern Tanzania. f) Ishiara Chogoria line; The 40km, 132kV single circuit line with a rating of 73MW will also involve the construction of one new substation at Chogoria and extension of Ishiara substation. The total construction cost and wayleave acquisition cost is estimated at Kshs.1.13 billion. The line will benefit the agricultural industry and Feed In tariff generation projects in the Mt. Kenya region. g) Garissa Habaswen - Wajir line; The 330km, 220kV single circuit line with a rating of 250MW will also involve the construction of two new substations at Wajir and Habaswen and extension of Garissa substation. The total construction cost and wayleave acquisition cost is estimated at Kshs.7.3 billion. Reliable supply of electricity will also result in rapid growth in the Meat and Meatproducts industries in Garissa and Wajir counties. Just completed Garsen substation which is part of the Rabai- Malindi- Garsen- Lamu line. 31

34 h) Voi- Taveta Line; the 107km, 132kV single circuit line with a rating of 80MW will also involve the construction of substation at Taveta with 33kV feeder bays. The total costs for the project is estimated to be Kshs. 2.6 billion. The line will benefit sisal, horticulture and livestock farmers. i) Rabai Bamburi Shanzu - Mtwapa Kilifi Line; the line will include a 60km, 132kV double circuit line from Rabai to Bamburi; 132kV single circuit to Kilifi, 132kV bays at Rabai, and two substations at Bamburi and Mtwapa. The estimated cost for the project is Kshs. 2.7billion. The line will benefit the development of tourism in the area. j) Suswa Ngong Line; the 40km, 220kV line and extension of substation works will cost Kshs. 2.1 billion. The line will be very useful in evacuating power from wind projects in Ngong and the surrounding areas. k) Kabarnet Rumuruti Line; the 111km, 132kV line and extension of substation works will costs Kshs 1.9 billion. Reliable power supply will assist in promoting tourism in Baringo County and support power evacuation for the biomass project proposed in Baringo County. l) Narok - Bomet Line; the 88km, 132kV line and substation and extension of substation works will cost Kshs 1.7 billion. The line will benefit the agricultural industry. VIII. Projects under Feasibility Studies KETRACO is undertaking feasibility studies to address the existing weak national grid and improve electricity access in various parts of the country. The feasibility studies are being undertaken by four consultants as follows: 1. M/s Feedback Infra Private Limited of India has been procured to undertake feasibility studies for the following projects: a) 38km, 400kV Isinya - Konza line The 400kV double circuit line will link the future ICT city at Konza with the national grid and in particular the generation stations in Olkaria, Menengai and Ethiopia through the Suswa Isinya line and the generation stations in Mombasa and Northern Tanzania through the Isinya substation. Besides offering an alternative line for supply of electricity the line will provide reliable supply of electricity to ICT city for 20 years. b) 205km, 400kV Longonot - Thika - Kangundo Konza line The 205km, 400kV double circuit line will complete the 400kV Nairobi Ring that is currently under construction by providing the northern link from the Suswa (Longonot) substation, passing along the northern outskirts of Nairobi and terminating at Konza. This line will in turn be connected to the southern link through the Konza Isinya Suswa line. The line will strengthen the national grid and offer reliable N-1 security. c) Kamburu - Embu (Kutus) - Thika line 196km, 220kV line with establishment/ extension of substations at Kamburu, Embu, Kiganjo and Thika. d) Kitui - Mutomo - Kibwezi 144 km, 132kV Line with establishment of substations at Kitui, Mutomo and Kibwezi. e) Ngong - Magadi 84km, 132kV Line and new substation at Magadi. f) Uplands Limuru Substation. Establish 132/33kV substation at Uplands. 2. M/s AF Consult (Switzerland) has been procured to undertake feasibility studies for the following projects: a) 70km, 220kV Kisumu - Kakamega Musaga line The 220kV double circuit line will ensure that Kakamega and Musaga have an alternative reliable supply line to compliment the 132kV line from Lessos to Tororo. b) Webuye - Kimilili - Kitale 73km, 132kV line with establishment/extension of substations at Webuye, Kimilili and Kitale. c) Kakamega - Kaimosi 25km,132kV transmission line, with establishment/ extension of substations at Kakamega and Kaimosi. d) Sotik - Kilgoris 48km, 132kV transmission line with a new substation at Kilgoris. 32

35 3. M/s Lahmeyer International of Germany a) Menengai - Kilgoris - Lake Victoria Ring 235km, 220kV or 400kV line with possible interconnection to Tanzania to complete the Lake Victoria Ring. b) Myanga Busia 41km 132kV line with associated substations. c) Rangala - Bondo - Ndigwa 72km, 132kV line with establishment/extension of substations at Rangala, Bondo and Ndigwa. d) Homa Bay - Sindo 72km, 132kV line from Homa Bay to Sindo through Karungo. e) Ndhiwa Karungu Bay 72km, 132kV line with extensions of substations at Ndhiwa and Karungu Bay. 4. M/s Power Grid Cooperation of India a) 288km, 220kV Kiambere Maua Isiolo line Under the LAPSSET programme Isiolo has been earmarked to be developed into an international resort city. The 220kV transmission line from Kiambere power plant will ensure that Isiolo is supplied with adequate electricity to meet its energy need. b) 152km, 220kV Isiolo Maralal line The line will be used as an alternative transmission line for power evacuation from future wind, solar and geothermal sites in middle regions of the Rift valley to the national grid. c) 306km, 220kV Isiolo Marsabit line with extension of substations at Isiolo and Marsabit. d) 188km, 400kV Loiyangalani Marsabit line The two lines will assist in harnessing the full potential of wind generation resource in northern Kenya by connecting potential wind farms sites with the national grid. e) 228km, 220kV Turkwel - Lodwar - Lokichogio line with establishment/extension of substations at Turkwel, Lodwar and Lokichogio. OTHER ACHIEVEMENTS In addition to projects implementation, the Company has achieved satisfactory results on many fronts through unreserved efforts in implementing the Company s Strategic Plan. Particularly during the period under review, KETRACO Management continued to review and strengthen the frameworks, policies, structures and processes in order to better align them to its growth strategies. Key achievements have been made on some of these as is shown hereunder: Human Resource Development The Company recognizes that a well-developed human resource is the lever that drives operational performance. Therefore, the Company has endeavoured to ensure that every employee is properly placed and equipped to perform the responsibilities assigned to them. To further strengthen the human resource capital, the Company continually builds staff capacity by training the staff in relevant courses as identified in the training plans. The Company has continued to implement the Job Evaluation Report recommendations which have enabled KETRACO to align its human capital to the strategic objectives and attain internal efficiency and internal equity relative to job value. KETRACO believes that effective recruitment and continuous training of staff are critical to its success. In the year under review, 37 additional staffs were recruited leading to increase in the staff complement from 128 to 165 at the close of the year. Competency development level also increased from 69% to 71% in the same period. The staff welfare programmes continued to be reviewed to ensure that KETRACO remains a competitive employment destination. An employee satisfaction survey carried out at the end of the year showed that employee satisfaction index had risen from 80.3% in the previous year to 82%. The Company continually ensures diversity in human resources development and management. A gender mainstreaming policy was developed and employees sensitized on gender issues through workshops. Gender parity was maintained during recruitment with the gender ratio being at 33% women. In addition, disability mainstreaming staff sensitization was undertaken. People with disability were given equal opportunity during recruitment. Automation of Operations The Company remains committed to building and investing in a World-class modern ICT-enabled infrastructure in order to enhance its operations and service delivery. Towards this objective, all 33

36 transmission lines have been designed incorporating Optical Ground Wire (OPGW) to facilitate the use of Supervisory Control & Data Acquisition and Energy Management Systems (SCADA/EMS) for automated operations. Excess fibre optic capacity will be leased to telecommunication service providers. Performance Management In line with good strategic management practices, KETRACO subscribes to the adage that says what gets measured gets done. In this regard therefore, performance management remains critical to realization of the corporate objectives and has been institutionalized across the entire organization. The fourth Performance Contract for the period 2012/2013 was signed between the Board and Government. I am pleased to report that during the annual evaluation for 2012/13, the Company s performance was rated Very Good. ISO Certification During the financial year 2012/2013, the Company made significant progress towards ISO Certification. Both internal and certification Quality Management System audits were successfully carried out by internal quality auditors and Kenya Bureau of Standards, respectively. Consequently, I am glad to report that the Company was ISO certified and an ISO-9001:2008 Certificate was awarded by the Kenya Bureau of Standards. Service Delivery Innovations In order to integrate cadastral data, Project Affected Persons (PAPs) data and aerial survey data with the Geographical Information System (GIS), and integrate the PAPs data and payments compensation data in one system, the Company drafted Terms of Reference for a Wayleaves Management System. Proof of concept was conducted with the selected firm. Two (2) demos of the Wayleaves Management Solution were presented to the Management Committee by the firm. The system was developed ready for implementation in project management. Corporate Social Responsibility (CSR) Guided by the principles of a responsible corporate citizen, the Company remains committed to engagement with local communities in project affected areas, general public and energy sector stakeholders to cultivate their goodwill. Hence the Company proactively participates in such engagements as guided by its Corporate Social Responsibility Policy. In this regard, KETRACO ensures that all projects are implemented through a consultative process with stakeholders from the planning stage to project completion. The Company further ensures that its operations are carried out observing humane and best practices taking into account that construction of transmission lines requires acquisition of land for substations and way-leaves access which entails compensation and resettlement of Projects Affected Persons (PAPs). KETRACO staff celebrating its 5th year Anniversary during the 2013 Staff End Year Party. 34

37 GRATITUDE I sincerely take this opportunity to thank all our stakeholders, including the Government, development partners, consultants, contractors, project-affectedpersons and the staff members, for their continued co-operation and support during the year 2012/2013. None of the great strides achieved and enumerated in this report would have been possible without the contributions from each of them. As we target to accelerate development of power transmission infrastructure, the Company looks forward to the year ahead with optimism as various projects under implementation are lined up for commissioning and many more are planned for implementation. With continued teamwork, consultation and cooperation, the Company remain strategically focused towards provision of quality, reliable and secure power supply in tandem with the national development agenda. ENG. JOEL KIILU MANAGING DIRECTOR & CEO 2 nd May, 2014 KETRACO Staff planting trees at Ngong Forest as part of its commitment to conserving the environment. 35

38 TAARIFA YA MKURUGENZI MKUU YA MWAKA UNAOISHA JUNI Zaidi na muhimu, hatuwezi kukosa kupatia kipaumbele maalum ujasiri wa mipango ya Serikali ya Jubilee ya kuongeza 5000+MW ya uzalishaji wa umeme katika gridi ya taifa katika kipindi cha miezi 40 kuanzia Septemba KETRACO itakuwa na jukumu muhimu sana ya ujenzi wa laini za usambazaji wa umeme kutoka kwenye vituo vya uzalishaji kwa ajili ya usambazaji kwa wateja. Katika kipindi cha mwaka, KETRACO iliendelea na mipango yake ya kasi ya kupanua usambazaji wa umeme katika gridi ya taifa nchini kote ili kuongeza na kuboresha nguvu ya usambazaji na kutegemewa kwa kuongozwa na maadili yake ya msingi ya, kushughulikia wateja, kufanya kazi kwa pamoja, ubunifu, ugunduzi, uadilifu na taaluma. Kampuni pia imepata mafanikio mengine mwakani, ambayo ni pamoja na kuimarishwa uwezo wa rasilimali ya watu, utoaji wa mazingira bora ya kazi, miundombinu ya ICT, mapitio ya usimamizi wa hatari wa biashara (ERM) mfumo na tathmini ya hatari, kupitia mipango ya kati na muda mrefu na uboreshaji wa huduma utaratibu wa utoajiwa. MAELEZO Katika miaka michache iliyopita, Kampuni imezidisha shughuli zake kwa lengo la kuimarisha na kupanua nguvu ya gridi ya umeme. Inatarajiwa kwamba hii itaimarisha kuegemea, ubora na usalama wa usambazaji wa umeme nchini pamoja na kuongezeka kwa upatikanaji wa umeme. Kampuni hii inaendelea kutekeleza majukumu yake halali katika kuleta mageuzi ya kiuchumi nchini Kenya. Kwa hivyo, ninachukua fursa hii kubwa kuwasilisha utendajikazi wa KETRACO wa mwaka wa fedha uliokamilika juni Katika mwaka wa fedha wa 2012/2013, kulikuwa na idadi ya maendeleo chanya katika sekta ya nishati. Hii ni pamoja na mapitio ya Sera ya Nishati na Sheria ya Nishati na kulinganisha sekta na sekta ndogo ya umeme kwenye katiba ya Kenya ya mwaka wa 2010 na ripoti muhimu za kushauri. Ushiriki wa washauri, CPCS Transcom ya Kimataifa ya kufanya utafiti wa soko ya umeme na SNC Lavalin International ili kufanya utafiti wa gharama ya huduma, matokeo ambayo mbali na madhara makubwa kwa shughuli za kampuni pia ni hatua kubwa katika sekta. Kwa lengo la kuchangia katika utekelezaji wa Ruwaza ya 2030, KETRACO inaendelea kufanya mamlaka yake, ambayo ni ya kupanga, kubuni, kujenga, kuendesha na kudumisha miundombinu mipya ya kusambaza umeme ambayo ni uti wa mgongo wa gridi ya taifa. Katika suala hili, Kampuni imepiga hatua kubwa katika kufikia malengo yake tangu kuanzishwa kwake Desemba Kufikia Juni 2009, urefu wa laini za kusambaza umeme ya volti ya juu ilikuwa 1,331Km kwa 220kV na 2112Km kwa 132kV, kwa ujumla ni 3443Km. Pamoja na mchango wa Kampuni, hali hii inatarajiwa kubadilika wakati miradi inayoendelea na mipango ya kimkakati ya miradi ya miundombinu itakamilika katika miaka mitatu ijayo. Katika kipindi hiki, Kampuni iliongeza laini ya kusambaza umeme ya urefu wa 141km katika gridi ya taifa. Hata hivyo tangu kuanzishwa kwake, Kampuni imekamilisha laini ya kusambaza umeme yenye urefu wa 756.5km ya 132kV na 220kV kama ilivyoainishwa katika Jedwali 1 hapa chini: - 36

39 Jedwali 1: Muda wa Kukamilika Volti ya juu ya laini za usambazaji (Km) NO Mradi Urefu Siku ya kukamilika 1 * Sondu Miriu - Kisumu 132kV 50 Julai Chemosit - Kisii 132kV 62 Machi Rabai - Galu 132kV 48 Machi Kamburu - Meru 132kV 122 Septemba Sang oro - Sondu 132kV 5 Juni Mumias- Rangala 132kV 34 Julai Kilimambogo -Thika-Githambo 77 Novemba kV 8 Thika - Gatundu ( Nyaga ) 132kV 30 Juni ** Rabai-Malindi -Garsen-Lamu 220kV 328 Machi 2014 Jumla ya Urefu (KM) 756 * Laini ya Sondu Miriu -Kisumu ilitekelezwa kupitia KenGen na kukabidhiwa kwa KETRACO. ** 324km ya 328km ya laini Rabai- Malindi -Garsen-Lamu ilikamilika mwezi wa Juni 2013, sehemu iliyobaki ilichelewa kutokana na mafuriko ya Mto Sabaki na Mto Tana na pamoja na vituo vya umeme ambavyo viliwashwa mwezi wa Machi Kielelezo 1: Muda utakaotumika kukamilisha laini ya umeme (Km) Urefu (km Jun-09 Muda Sep-09 Dis -09 Mar-10 Jun-10 Sep-10 Dis -10 Mar-11 Jun-11 Sep-11 Dis -11 Mar kV 132kV Total Chini ya Mpango wa Maendele wa Least Cost Power Development Plan (LCPDP), KETRACO inatekeleza miradi kadhaa iliyopewa kipa umbele yenye jumla ya 4900km ya laini za usambazaji ya takriban 2300km ya 132kV, 570km ya 220kV na 1440km ya 400kV laini ya AC na 612km ya 500kV ya aina ya HVDC kati ya mwaka wa 2013 na Laini za usambazaji zilizochaguliwa, vituo vya umeme na miradi ya kikanda kuunganishiwa iko katika hatua mbalimbali za maendeleo. Mpango huu wa maendeleo katika muda wa kati ni muhimu kwa ajili ya kuboresha mfumo, upanuzi wa gridi ya taifa na usambazaji wa umeme kutoka katika kampuni za uzalishaji umeme.hii pia ni katika awamu ya pili kati mpango wa Ruwaza ya 2030 yenye malengo ya maendeleo. Jun-12 Sep-12 Dis -12 Mar-13 Jun-13 Jumla ya gharama ya uwekezaji wa miradi iliyokubaliwa inakadiriwa kuwa dola za Marekani 2 bilioni kwa bei za sasa. Imepangwa kuwa kufikia mwaka wa 2033 KETRACO itakuwa imejenga zaidi ya 11,230km za laini mpya za usambazaji umeme kwa gharama inayokadiriwa dhamani ya dolla za marekani 3.55 bilioni. Miradi mipya ya laini za usambazaji umeme zina lengo la kuendeleza gridi iliyoshupavu ili kuboresha ubora na kuegemea ugavi dhabiti wa umeme nchini kote, na pia kuhakikisha kutosha upatikanaji, kuendesha na usalama wa umeme nchini Kenya. Pamoja na mipango ya kuimarisha uwezo, maendeleo ya miundombinu itawezesha KETRACO kwa ufanisi majukumu ya baadaye ya mfumo wa nguvu na operesheni za soko. Kuzingatia mipango ya maendeleo iliyopangwa ya kampuni, maendeleo ya miundo mbinu itaweka KETRACO katika nafasi ya ufanisi kwa mfumo wa nguvu katika shughuli za soko ya nchi na ya kanda. Urefu wa laini za usambazaji wa umeme wenye viwango vya volti zilizopangwa zinavyo onekana katika Kielelezo 2 hapo chini. Kielelezo 2: Urefu wa laini zilizopangwa kabla ya 2033 (Km) Urefu (km Mwaka kV 220kV 400kV 500kV Total Utekelezaji wa miradi Katika mwanzo mwa mwaka wa fedha, kazi ya ujenzi katika miradi ifuatayo ilikuwa inaendelea; (i) 77km 132kV Kilimambogo -Thika-Githambo; (ii) 30km 132kV Thika - Gatundu (Nyaga); (iii) 328km 220kV Rabai - Malindi - Garsen - Lamu; na (iv) 482km 400/220kV Mombasa - Nairobi. Katika mwisho wa mwaka wa fedha miradi mitatu ya kwanza ilikuwa karibu kukamilika. Ujenzi wa laini ya Mombasa -Nairobi iliendelea licha ya changamoto 37

40 kubwa zilizohusu sehemu ya mashamba na inatarajiwa kukamilika ifikapo Juni Aidha, Kampuni ilianza kazi ya ujenzi wa miradi ifuatayo: - (i) 354km 132kV Kenya Electricity Expansion Programme (KEEP); Laini za Kindaruma - Mwingi - Garissa, Eldoret - Kitale na Kisii - Awendo yote ambayo kandarasi ilikabidhiwa kwa mhandisi wa laini na vituo vya umeme; (ii) 431km 132kV Power Transmission Improvement Projects: laini za Ishiara - Kieni; Nanyuki - Nyahururu; Lessos - Kabarnet; Olkaria - Narok; Bomet - Sotik; na Mwingi - Kitui - Wote - Sultan Hamud laini na vituo vya umeme; (iii) 100km 400kV Nairobi Ring: Laini ya Suswa Isinya aina ya saketi mbili na vituo vya umeme maeneo ya Isinya, Athi River, Ngong na Koma Rock na upanuzi wa kituo cha umeme Dandora; (iv) 25km 220kV Olkaria I - Suswa na 25km 220kV Olkaria IV Laini aina ya saketi mbili ya Suswa ambayo inatekelezwa kupitia KenGen. Pia katika mwaka huo, mikataba ya Uhandisi, Ununuzi na Ujenzi (EPC) zilitolewa kwa ajili ya miradi ifuatayo: (i) 430km 400kV Loiyangalani - Suswa; (ii) 96Km 132kV Meru - Isiolo - Nanyuki; (iii) 127km 400kV Lessos- Tororo - laini ambayo itaunganisha Kenya na Uganda; (iv) 153km 132kV Machakos - Konza - Kajiado - Namanga na vituo vya umeme; (v) 90km 220kV Turkwel - Ortum -Kitale laini na vituo vya umeme. Zaidi ya hayo, mikataba ya usimamizi na uhandisi ilipewa ilitengenezwa kwa ajili ya miradi ifuatayo: (i) (ii) 300km, 400/220kV Olkaria - Lessos - Kisumu laini ya saketi mbili na vituo vya umeme Olkaria, Lessos & Kisumu; 612km 500kV HVDC Eastern Electricity Highway (kiunganishi cha Ethiopia-Kenya) kituo cha umeme cha 400/220kV. Ujenzi wa kituo cha umeme cha Mwingi 38

41 Upembuzi yakinifu ilikamilika kwa miradi ifuatayo: (i) 50km 132kV Meru - Maua (ii) 148km 132kV Nyahururu - Maralal (iii) 240km 220kV Garsen- Hola -Garissa (iv) 330km 132kV Garissa- Wajir (v) 50km 132kV Awendo - Isabenia (vi) 60km 132kV Galu - Lunga Lunga (vii) 40km 132kV Ishiara - Chogoria (viii) 20km 400kV Menengai Rongai (ix) 100km 400kV kiunganishi cha Kenya-Tanzania (wa utafiti, kina kubuni na nyaraka za zabuni maandalizi ulikamilika). Aidha, upembuzi yakinifu kwa ajili ya miradi ishirini mpya ilianza. Maelezo ya utekelezaji wa miradi mbalimbali umepewa hapa chini: - Miradi ya Kuimarisha wa mifumo Miradi hii inahusu uimarishaji wa mfumo na miradi ya kukuza uwezo na kuboresha uwezo wa nishati ya umeme na kukabiliana na changamoto ya volti za chini, hasara kubwa inayopatikana wakati wa usambazaji wa umeme, kukosekana kwa uhakika wa ugavi na usalama wa mtandao. Miradi hii ni pamoja na: - Laini ya kusambaza umeme ya Nairobi - Mombasa (482km 400/220kV) Mradi huu unahusu ujenzi wa laini ya 482km yenye uwezo wa 400/220kV katika saketi mbili kutoka kituo kidogo cha Rabai hadi kituo cha umeme cha Embakasi chenye uwezo wa kubeba nguvu za umeme kiasi cha 1500MW. Mradi huu unalenga kuziba pengo baina ya usambazaji wa nguvu katika Mkoa wa Pwani na mahitaji ya Nairobi na maeneo mengine ya nchi. Ujenzi ulianza Desemba 2010 na inakadiriwa kuwa utamaliziwa Juni Ukikamilika, mradi utawezesha usambazaji wa umeme imara na wa kuaminika kwa miji mingine katikati ya Mombasa na Nairobi kama vile miji midogo ya Isinya, Athi River, Kitengela, Kisaju, na Mariakani. Pia utawezesha upanuzi wa vituo vidogo na mtandao wa usambazaji kusababisha fursa mpya kwa ajili ya uwekezaji. Inatarajiwa kuwa mradi huu utawezesha viwanda vipya vya saruji, usafishaji wa mafuta ya petroli na kuchoma vyuma karibu na kaunti za Machakos na Kajiado; kuwezesha wakenya kupata kazi. Laini hii pia itawezesha usafiri bora wa bidhaa na abiria kwa kutoa umeme kwa gari moshi ya kisasa ya umeme. Mji wa Teknologia wa Konza (Africa Silicon Savannah) uliozinduliwa hivi juzi na Kaunti ya Machakos unalegwa na mradi huu pia ili kutoa nguvu za umeme za kutosha mahitaji kwa ajili ya ukuaji wa uchumi na maendeleo ya mji huo. Kukua kwa haraka kwa Teknologia ya Mawasiliano (ICT) katika nchi kutachangiwa pia kwa kuwa mradi huu unauwezo wa kusambaza na kuimarisha tovuti kupitia huduma zinazotolewa na kamba ya fiber optic ambayo imewekwa juu ya laini za usambazaji umeme. Hii itaboresha huduma za Teknologia ya Mawasiliano (ICT) na huduma zinginezo. Upande wa miradi ya kikanda, Kenya na jirani zake; Uganda, Rwanda, DRC, Burundi, Sudan Kusini na Tanzania, watafaidika sana na mradi huu na kupunguza usafiri kua na uharibifu wa barabara zetu kutokana na uanzishaji wa mitambo ya uzalishaji wa umeme katika sehemu ya pwani, ufanisi katika kusukuma mafuta kupitia mabomba na kuongezeka kwa biashara ya nguvu za umeme kusababisha mahitaji ya chini katika usafirishaji wa mafuta. Kuunganishwa kwa kanda na gridi kutaweza kuchangia pakubwa uwezo wa kubadilishana umeme kibiashara kati ya nchi hizi. Laini ya kusambaza umeme ya Rabai Malindi - Garsen Lamu (328km 220kV) Mradi huu unahusu ujenzi wa laini ya 328km yenye uwezo wa 220kV ya saketi moja pamoja na vituo vidogo vya umeme Malindi, Garsen na Lamu. Laini hii yenye uwezo wa 230MW unafadhiliwa na Exim Bank ya China pamoja na Serikali ya Kenya kwa gharama ya jumla ya Kshs.9.5 bilioni. Mkandarasi kwa ajili ya mradi huo ni CAMCE wa China na mshauri wa uhandisi ni Parson Brinckerhoff wa Uingereza. Mradi huu ulianza mnamo Desemba 2010 na ulikamilika Machi 2014 na sehemu ya Rabai Malindi uliwashwa. Faida ya mradi ni pamoja na kupunguza hasara ya madaraka kati ya miji ya Kilifi na Malindi ambayo hivi sasa inatumia laini ya volti ya chini, kuondoa gharama kubwa ya dizeli mjini Lamu, usambazaji wa nishati kwa bandari iliyopangwa ya Lamu, mapendekezo ya mji wa Kilifii wa mapumziko na sehemu ya ukanda wa LAPSSET. Walengwa katika sekta ya kilimo pia ni pamoja na idara za Tana River Development Irrigation Scheme, National Cereal and Produce Board (NCPB) na magala ya kuhifadhi nafaka ya Garsen. Pia,viwanda vya sukari vinavyopendekezwa katika Jimbo la Mto Tana vitapata umeme wa kuaminika na hii itasababisha upanuzi wa kilimo cha umwagiliaji, usindikaji na uhifadhi wa vifaa vya mazao. Laini hii itasaidia katika kupanua utalii na viwanda vingine katika Pwani ya Kaskazini. 39

42 Laini ya kusambaza umeme ya Mzunguko wa Nairobi na Vituo Husika Vidogo Mradi wa Mzunguko wa Nairobi unajumuisha ujenzi wa laini ya 100km yenye uwezo wa 400kV ikiwa na saketi mbili kutoka kituo cha umeme cha Suswa hadi kituo cha umeme cha Isinya na itaweza kusafirisha umeme wa kiwango cha 1700MW, kilomita 40 ya 220kV na pia kutakuwa na ujenzi wa vituo vya umeme vyenye uwezo wa 220kV katika sehemu ya Suswa, Ngong, Isinya, Athi River na Koma Rock. Pamoja na hayo, kutakuweko na nyaya ya 3km yenye uwezo wa 220kV ambayo itapita chini ya ardhi kutoka kituo cha umeme cha Dandora hadi kile cha Koma Rock.Mkandarasi wa laini ya kusambaza umeme ni Jyoti (India), Siemens (Ufaransa) pamoja na Iberdrola (Hispania). Washauri ni Power Engineers (Afrika Kusini) na KEMA (Uholanzi). Mradi umeanza na unatarajiwa kukamilika Novemba Unafadhiliwa na AFD na Serikali ya Kenya kwa gharama ya jumla ya Kshs.16.9 bilioni. Mradi wa Mzunguko wa Nairobi utawezesha kuwemo kwa njia zaidi ya mmoja mbadala ya kusambaza nguvu katika eneo la Nairobi na sehemu za karibu. Ongezeko katika kuegemea ugavi wa umeme kisawa italeta mazingira mazuri kwa ajili ya uwekezaji na ukuaji katika mji mkuu na maeneo ya jirani. Laini ya Suswa - Isinya itakuwa kipande kikuu katika uhamisho wa nguvu kutoka/ kupeleka Ethiopia, Tanzania na Uganda. unafadhiliwa na JICA pamoja na Serikali ya Kenya kwa gharama ya jumla ya Kshs.13.2 bilioni. Unatarajiwa kukamilika mwaka wa Sababu kuu ya mradi wa Olkaria-Lessos-Kisumu ni kuwezesha kukuza umeme wa nishati ya mvuke na kusaidia kuimarisha uhusiano kati ya sehemu ya mashariki na magharibi ya Gridi ya Taifa. Mradi huu pia utakidhi kuongezeka kwa mahitaji ya umeme katika sehemu za Kaunti za mikoa ya Magharibi na zile za Kaskazini mwa Bonde la Ufa kutoka kitovu cha nishati cha Olkaria. Hii hatimaye itasababisha kustaafu kwa 30MW wa nguvu za dharura mjini Muhoroni. Viwanda kadhaa vya kilimo na viwanda kama vya chai katika kaunti ya Nandi, miwa katika sehemu ya ukanda wa miwa (Miwani-Kibos), KARI-Kibos na vinginevyo katika Kaunti ya Kisumu. Laini ya kusambaza umeme ya Olkaria-Lessos- Kisumu (300 km 220/400kV) Ujenzi wa laini ya 300km yenye uwezo wa 400/220kV inahusisha ujenzi wa laini ya 400kV ya saketi mbili kutoka Olkaria ili kuwezesha usafiri wa umeme wa nishati ya mvuke hadi Lessos. Laini nyingine ya saketi mbili itajengwa kutoka kituo cha umeme cha uwezo wa 220kV cha Lessos hadi kituo cha umeme cha Kisumu kipya. Laini ya Lessos itakuwa na uwezo wa kusafirisha 1200MW hadi huku, na sehemu ya Kisumu itakuwa na uwezo wa kusafirisha umeme kiasi cha 500MW. Mradi huu Wakuruzenzi wazuru mradi wa Thika-Githambo 40

43 II. Miradi ya uokoaji wa umeme Kampuni inatekeleza miradi kadhaa kulenga kuokoa umeme kutoka vituo vya kizazi mbalimbali. Miradi hii imejadiliwa hapa chini: Laini ya kusambaza umeme ya Loiyangalani - Suswa (430km 400kV) Ujenzi wa laini ya 430km yenye uwezo wa 400kV ya saketi mbili kutoka mradi wa Ziwa Turkana wa Upepo maeneo ya Loiyangalani hadi kituo cha umeme cha Suswa. Laini hii ina uwezo wa kusafirisha kipimo cha umeme cha 1300MW na itatumika kusafirisha umeme kutoka mradi wa 300MW wa Ziwa Turkana wa Upepo. Inatarajiwa kuwa laini hii itatumika siku za usoni kusafirisha umeme kutoka kwa mashamba ya upepo na miradi ya mvuke yatarajiao kubuniwa sehemu za Bonde la Ufa na Kaskazini mwa Kenya (Marsabit). Mkataba wa EPC wa laini hii ulisainiwa na M/S Isolux Ingeniera ya Hispania na mkataba wa ujenzi wa vituo hivyo ulisainiwa na Siemens T & D. KEMA (Uholanzi) ni washauri wa uhandisi kwa ajili ya mradi. Na unatarajiwa kukamilika katika mwaka Kituo cha umeme na laini ya Loiyangalani - Suswa zimefadhiliwa na Serikali ya Uhispania na Serikali ya Kenya kwa gharama ya jumla ya Kshs.16.5 bilioni, huku Uhispania wakifadhili Kshs.12 bilioni na Serikali ya Kenya ikifadhili zilizobaki Kshs. 4.5 bilioni. Laini mbili za kusambaza umeme za Olkaria- Suswa (25km 220kV) Mradi wa Olkaria-Suswa ambao unahusu ujenzi wa laini mbili za 25km zenye uwezo wa 220kV wa saketi mbili kutoka katika kiwanda kipya cha 280MW cha Olkaria IV na I hadi kituo cha umeme cha Suswa unatarajiwa kukamilika Julai Mradi unafadhiliwa na JICA, AFD EIB na Serikali ya Kenya kwa gharama ya Kshs. 0.9 billion. Mkandarasi wa laini ni KEC International kutoka India ilhali wahandisi washauriwa ni SKM. Mradi huu umetekelezwa kupitia KenGen. Laini ya kusambaza umeme ya Sangoro-Sondu (5 km 132kV) Laini hii ni ya saketi moja na urefu wa 5km na uwezo wa 132kV yenye kushikanisha kituo cha umeme cha Sangoro na kituo cha umeme cha Sondu Miriu. Mradi huu ulikamilika Machi 2012 na ulifadhiliwa na JICA pamoja na Serikali ya Kenya kwa gharama ya Kshs.1.2 bilioni. Mradi huu ulitekelezwa kupitia KenGen. III) Miradi ya Kuunganisha Nchi Jirani Ili kuongeza ushirikiano wa kikanda na kukuza mtiririko wa nguvu za kikanda, Kampuni inatekeleza miradi muhimu ya kikanda. Lengo kuu ikiwa kuleta utulivu wa umeme na kusaidia biashara ya umeme kati ya nchi jirani. Miradi hio ni: Laini ya kusambaza umeme ya Lessos -Tororo (127km 400kV Kuunganisha Uganda-Kenya) Mradi huu unahusu ujenzi wa laini ya 127km ya uwezo wa 400kV ya saketi mbili kutoka kituo cha umeme cha Lessos upande wa Kenya hadi Tororo nchini Uganda. Mradi huu unaweza kusafirisha umeme kipimo cha 1200MW na unatarajiwa kukamilika Juni Mshauri kwa ajili ya mradi ni RSW International (Aecom) kutoka Canada na zabuni ya kujenga laini ilikabidhiwa MS Instalaciones Inabensa ya Uhispania. Mradi huu pia ni sehemu ya mradi wa kikanda wa Nile Equatorial Lakes Subsidiary Action Programme (NELSAP) unaoleta pamoja nchi za Kenya na Uganda, Rwanda, Burundi na sehemu ya Mashariki ya Congo. Mradi huu unafadhiliwa na AfDB na Serikali ya Kenya kwa jumla ya Kshs.4.9 bilioni. Laini hii itawezesha usambazaji wa umeme bora katika nchi za Afrika Mashariki. Laini ya kusambaza umeme ya Ethiopia-Kenya (612km 500kV, HVDC Barabara ya Umeme ya Afrika Mashariki) Mradi wa barabara ya umeme ya Afrika Mashariki unakusudia kuunganisha gridi za umeme za Kenya na Ethiopia na utahusu ujenzi wa laini ya 612km 500kv HVDC yenye uwezo wa kusafirisha umeme moja kwa moja kutoka kwa vituo vya kubadilisha umeme Suswa hadi mwisho wa laini. Mradi huu utakuwa na uwezo wa kusafirisha 2000MW kati ya nchi hizo mbili. Itakapokamilika laini hii itaiwezesha Kenya kusambaza umeme kwa bei nafuu kutoka Ethiopia. Muungano wa mitandao iliyopangwa itaharakisha maendeleo ya rasilimali katika kanda za nishati hiyo itasaidia kuongeza na kustahimili mahitaji ya umeme na kupunguza gharama za umeme kwa nchi shiriki. Mradi huu ukikamilika, nchi za Kenya na Ethiopia pia zitaweza kuimarisha na kuendeleza ukuzaji wa umeme kotokana na vyanzo vingi kama vile upepo, miali ya jua, mvuke na kadhalika. Pia, uwezekano wa kusambaza 41

44 nishati ya ziada inayotokana kwa kuboresha mazingira kutokana na kupunguzwa uzalishaji wa umeme wa kutumia mafuta ya petrol. Hivi sasa Mshauri kwa ajili ya mradi ni M/s Lahmeyer International ya Ujerumani na leseni ya NEMA pia imepewa. Mkandarasi wa EPC anatafutwa na mradi huu unatarajiwa kukamilika Juni Mradi huu unafadhiliwa na Benki ya Dunia, AfDB, AFD na Serikali ya Kenya na utagharimu Ksh bilioni. Katibu mkuu wazamani wa Kawi Bwana Patrick Nyoike akizungumza katika warsha ya kuzinduliwa kwa laini ya kusambaza umeme ya 612Km ya Ethiopia- Kenya katika hoteli ya Crowne Plaza, Nairobi. Laini ya kusambaza umeme ya Kenya -Tanzania (93km 400kV) Mradi huu ni sehemu ya Kenya - Tanzania - Zambia na utaunganisha mtandao wa nchi za Afrika Magharibi na mtandao wa nchini za Kusini Afrika kupitia ujenzi wa laini hii ya 400kV ya saketi mbili. Upembuzi yakinifu ya laini ya Isinya- Arusha - Singida ya 507.5km, 93.1km ikiwa Kenya na 414.4Km ikiwa nchini Tanzania. AfDB imehakikisha haja ya kufadhili ujenzi wa laini hii utakaogharimu Ksh.4.8bilioni. Mradi huu utapeana uwezo wa kuuza umeme na kuunganisha Kenya kwa mtandao wa nchi za Afrika Kusini. Upembuzi yakinifu wa mradi, uchoraji wa kina na nyaraka za zabuni imekamilika. Mradi huu inakadiriwa kukamilika Januari IV Miradi ya Umeme Kupenya Nchi Miradi ya kikundi hiki iko kwenye mpango wa taifa wa Energy Access Scale-Up Programme na lengo lake kuu ni kuongeza upatikanaji wa umeme na kukabiliana na changamoto ya kupenya na kusambaza umeme nchini kote. Miradi chini ya mpango huu ni kama ifuatavyo: (a) Miradi ya Upanuzi wa usambazaji Miradi hii inafadhiliwa na Benki Kuu ya KBC ya Ubelgiji na Serikali ya Kenya. Laini ya kusambaza umeme ya Kilimambogo - Thika - Githambo na Thika - Gatundu (Nyaga) (132kV) Laini hizi mbili zinahusisha ujenzi wa 17km za 132kV saketi mbili kutoka makutano ya Kilimambogo hadi kituo cha umeme cha Thika (Mang u), ikifuatiwa na sehemu ya 10km za saketi mbili kabla ya kupasuliwa na kuwa saketi moja ya 50km hadi Githambo kwa upande mmoja, na 20km upande mwingine hadi kituo cha umeme cha Gatundu. Kila laini ina weza kusafirisha 73MW. Miradi hii ni pamoja na ujenzi wa vituo vya umeme vya Thika, Githambo na Gatundu. Miradi ya Kilimambogo-Thika, Thika- Gatundu na kituo kidogo kipya cha Mang u, yalikamilika manamo Desemba, 2012 na huku upande wa Githambo ukitarajiwa kukamilika Septamba Mradi huu unafadhiliwa na Benki Kuu ya KBC ya Ubelgiji kwa gharama ya Kshs 3.6 bilioni pamoja na Serikali ya Kenya. Wakati utakamilika, mradi huu utahakikisha kwamba mji wa Thika, sehemu kubwa ya Kiambu na Kaunti ya Murang a zitapata umeme thabiti na hivyo kuongeza kasi ya ukuaji katika sekta ya Viwanda na Kilimo. Laini ya kusambaza umeme ya Nanyuki Isiolo - Meru (96km 132kV) Ujenzi wa laini ya 96km yenye uwezo wa 132kV na saketi moja kutoka kituo cha umeme cha Nanyuki hadi cha Isiolo na Meru unatarajiwa kukamilika mwezi Disemba mwaka Mradi huu pia unahusu ujenzi wa kituo cha umeme kipya Isiolo na upanuzi wa vituo vya umeme katika Nanyuki na Meru. Laini hii inaweza kusafirisha 73MW. Mradi unafadhiliwa na Benki ya KCB ya Ubelgiji na Serikali ya Kenya na itagharimu Kshs. 2.5bilioni. Mkandarasi kwa ajili ya mradi huu ni CG Holdings ya Ubelgiji. Licha ya kutoa njia mbadala kwa ajili ya usambazaji wa umeme kutoka vituo viwili tofauti vya uzalishaji wa umeme kwa maji, laini hii itakuwa chanzo cha kuaminika wa usambazaji wa umeme katika jiji la Isiolo linalopangiwa kuwa na maendeleo kama mji wa mapumziko katika mradi wa kimataifa wa njia ya LAPSSET. 42

45 Wakurugenzi na wafanyakazi wa KETRACO wakizuru kituo cha Umeme cha Mwingi b) Miradi ya uboreshaji wa umeme, Laini ya kusambaza umeme ya Mumias - Rang ala (34km 132kV) Mradi huu wa 34km na uwezo wa 132kV una saketi moja kutoka Mumias hadi Rang ala, na una uwezo wa kusafirisha umeme kipimo cha 73MW, na ulikamilika Agosti, Mradi ambao pia ni pamoja na ujenzi wa kituo cha umeme cha Rang ala na upanuzi wa kituo cha umeme cha Mumias ulifadhiliwa na Serikali ya Kenya kwa gharama ya Kshs. 1.2 Bilioni. Siaya na kaunti jirani zitanufaika pakuu kwa uwezo wa mradi huu kusambaza umeme. c) Kenya Electricity Expansion Program (KEEP) Huu ni mpango wa upanuzi wa umeme unaofadhiliwa na Benki ya Dunia na Serikali ya Kenya. KEEP inashughulikia uzalishaji, usafirishaji na usambazaji katika sekta ya nishati. Laini ya kusambaza umeme ni 354km 132kV na vituo vya umeme na mradi huu inahusu: - Laini ya kusambaza umeme ya Kindaruma- Mwingi- Garissa (250km 132kV) Mradi huu utahusisha ujenzi wa laini ya 132kV ya saketi moja kutoka Kindaruma hadi Garissa kupitia Mwingi na vituo vya umeme vipya Mwingi na Garissa, na pia kazi ya upanuzi katika kituo cha umeme cha Kindaruma. Huu ni moja wapo ya miradi tatu zinazofadhiliwa na Banki ya Dunia na Serikali ya Kenya kwa gharama ya Kshs. 3.4 bilioni. Mkataba wa ujenzi ulipatiwa Tata Project Ltd. ya India na upande wa vituo ukapewa KEC International Ltd ya India. Mradi huu unatarajiwa kukamilika juni Licha ya kuboresha upatikanaji wa umeme kwenye maeneo mbalimbali kando ya njia ya laini hii, huu ndio mradi wa kwanza wa volti za juu sehemu za Mwingi na Garissa na utasaidia kwa kundoa viwanda vya kuzalisha umeme kwa mafuta aina ya dizeli. Pia utawezesha umeme unaozalishwa na miali ya jua, upepo na kuni katika sehemu ya Garissa kuweza kufikia Gridi ya Taifa na kutumika sehemu zingine za nchi. 43

46 Laini ya kusambaza umeme ya Eldoret-Kitale (60km 132kV) Mradi huu unahusu ujenzi wa laini wa 60km kutoka Eldoret hadi Kitale wa 132kV wa saketi moja, kituo kipya cha umeme Kitale na upanuzi wa kituo cha Eldoret. Mkataba wa ujenzi wa kituo cha umeme ulipatiwa M/S ABB ya Afrika Kusini (Pty) Ltd na upande wa laini ukatunukiwa KEC International ya India. Mradi huu unafadhiliwa na Benki ya Dunia na Serikali ya Kenya kwa gharama ya Kshs.1.6 bilioni na unatarajiwa kukamilika ifikapo Machi, Utainufaisha sana sekta ya kilimo katika sehemu hii ambayo inajulikana kama kikapu cha kitaifa cha nafaka na pia kusambaza umeme nyumbani. Laini ya kusambaza umeme ya Kisii-Awendo (44km 132kV) Mradi huu unahusu ujenzi wa laini ya 132kV ya saketi moja kutoka Kisii kuenda Awendo, kituo kipya cha umeme katika Awendo na kupanua kituo cha Kisii. Mkataba wa ujenzi wa vituo ulipatiwa M/S ABB ya Afrika Kusini (Pty) Ltd na ule wa laini ukapatiwa KEC International Ltd ya India. Mradi huu unatarajiwa kukamilika Juni Mradi huu unafadhiliwa na Benki ya Dunia na Serikali ya Kenya kwa gharama ya Kshs.1.4 bilioni. Zaidi ya kutoa nyongeza ya kuaminika ya umeme, pia mradi huu utachangia katika kufaidisha sekta ya sukari na pia kupea umeme unaotarajiwa kuzalishwa katika kiwanda cha Sony Sugar. d) Kenya Power Transmission System Improvement Programme (KPTSIP) Kampuni pia inatekeleza mradi wa kuboresha mfumo wa Kenya Power Transmission System Improvement Programme (KPTSIP), ambao unajumuisha lani za kusambaza umeme sita ya urefu 431km na vituo vya umeme vimejadiliwa hapo chini. Kila laini ya kusambaza umeme intakuwa na uwezo wa 73MW. Mradi huu wa KPTSIP unafadhiliwa na AfDB na Serikali ya Kenya kwa gharama ya jumla ya Kshs.8.1 bilioni. Washauri ni SMEC International, mkandarasi wa laini ni Shirika la Jyoti Structures na mkandarasi wa vituo vya umeme ni CAMCE (China) Engineering Company. Miundo ya kina kubuni kwa vituo vya umeme na laini za kusambaza umeme vinaendele na mradi unatarajiwa kuwa utakamilika ifikapo Septemba Miradi hii itaongeza uzambazaji wa umeme katika maeneo ya Kabarnet, Nyahururu / Rumuruti, Narok, Sotik, Bomet, Kitui, Wote, Sultan Hamud, Ishiara na Kieni. Upatikanaji wa umeme wa kuaminika utabadilisha maeneo haya kwa ajili ya kilimo na kwa ujumla viwanda pia vitasaidia serikali za wilaya. Laini ya kusambaza umeme ya Lessos Kabarnet (65km 132kV) Mradi huu wa urefu wa 65km unahusisha ujenzi wa laini ya 132kV yenye saketi moja kutoka Lessos hadi Kabarnet na kituo kipya cha 132/33kV mjini Kabarnet, huku upanuzi wa kituo cha Lessos pia ulitekelezwa. Laini ya kusambaza umeme ya Nanyuki- Nyahururu ( Rumuruti) (79km 132kV) Mradi huu unahusu ujenzi wa 79km za 132kV ukiwa saketi moja kutoka Nanyuki hadi Nyahururu (Rumuruti) na kituo kipya cha umeme cha 132/33kV sehemu ya Nyahururu, huku upanuzi ukifanyiwa kituo cha umeme cha Nanyuki. Laini ya kusambaza umeme ya Olkaria - Narok (68km 132kV) Kuanzia kushoto Wakurugenzi Fidesius Nyaga, Daniel Mwaura na Patience Nyaoga katika mkutano na wakilishi wa Kaunti ya Migori Huu ni mradi wa 68km ukiwa na saketi moja kutoka Olkaria hadi Narok, pia unahusu ujenzi wa kituo kipya cha 132/33kV Narok na upanuzi wa kituo cha Olkaria. 44

47 Laini ya kusambaza umeme ya Sotik Bomet (33km 132kV) Laini hii ya 33km kutoka Sotik hadi Bomet inahusisha ujenzi wa saketi moja ya 132kV na kituo cha umeme cha 132/33kV Bomet na Sotik. Laini ya kusambaza umeme ya Mwingi Kitui - Wote - Sultan Hamud (153km 132kV) Mradi huu unahusisha ujenzi wa laini ya saketi moja ya 132kV kutoka Mwingi kupitia Kitui, Wote hadi Sultan Hamud na ujenzi wa vituo vya umeme vipya za 132/33kV Kitui, Wote na Sultan Hamud, na upanuzi wa kile cha Mwingi. Laini ya kusambaza umeme ya Ishiara Kieni (3km 132kV) Laini hii ya usambazaji umeme ina husisha ujenzi wa 33km za 132kV kutoka Ishiara hadi Kieni, pamoja na kituo cha umeme cha 132/33kV hapo Kieni na mashine ya kubadilisha njia ya umeme hapo Ishiara. V. Miradi ya Ziada Kampuni pia inatekeleza miradi ifuatayo ambayo iko katika hatua tofauti tofauti: (i) Benki ya India ya EXIM na Serikali ya Kenya zimefadhili miradi ifuatayo: a) Laini ya kusambaza umeme ya Turkwel Ortum - Kitale Mradi huu wa 90Km 220kV wa saketi moja kutoka kiwanda cha uzalisaji umeme cha Turkwel hadi Ortum na Kitale utaweza kubeba 250MW. Mradi huu unahusisha ujenzi wa kituo cha umeme kipya cha Ortum na vile vya Kitale na Turkwel vitapanuliwa. EPC ambao ndio wakandarasi wa laini ya kusambaza umeme na vituo vya umeme wameshapewa kandarasi na mradi huu unatarajiwa kukamilika ifikapo Desemba Kwa kuongezea, mradi huu utawezesha Kitale kupata njia mbadala na itachangia pia kusambaza umeme kwenye viwanda vya saruji vinavyotarajiwa sehemu ya Ortum. Kituo kidogo cha umeme cha Kitale b) Laini ya kusambaza umeme ya Machakos - Konza - Kajiado - Namanga Huu ni mradi wa 153km wenye uwezo wa 132kV ya saketi moja utakao toka Machakos kwenda Konza, Kajiado na Namanga; na unauwezo wa kusafirisha umeme kiasi cha 73MW. Mradi huu pia utahusu ujenzi wa vituo vinne vya umeme vipya katika Machakos, Konza, Kajiado na Namanga. EPC ambao ndio wakandarasi wa laini ya kusambaza umeme na vituo vya umeme wameshapewa kandarasi na mradi huu unatarajiwa kukamilika ifikapo Desemba Mradi huu utaimarisha gridi iliyopo kwa wakati huu na pia kuongezea upatikanaji wa umeme katika sehemu ya Machakos, Konza, Kajiado na Namanga na sehemu jirani. Uenezaji thabiti wa umeme pia utachangia ukuaji wa haraka wa viwanda kama vile vya nyama na mifugo sehemu ya Kajiado. Mji wa teknologia wa Konza pia utafaidika na mradi huu. Kwa jumla laini za kusambaza umeme za urefu wa 243km na vituo vya umeme vitafadhiliwa na Banki ya Exim ya India pamoja na Serikali ya Kenya kwa gharama ya jumla ya Kshs.6.3 bilioni. Banki ya Exim ya India watatoa dola za Marekani 62 milioni. 45

48 ii) Laini ya kusambaza umeme ya Sondu- Homa Bay- Awendo (100Km, 12kV) Benki ya Ubelgiji -KBC na Serikali ya Kenya zitafadhili mradi wa Sondu - Homa Bay - Awendo ambao ni wa urefu wa 100km na wenye uwezo wa 132kV na saketi moja. Unatoa umeme kwenye kiwanda cha uzalishaji wa umeme cha Sondu hadi Homa Bay na Kitale. Laini hii inauwezo wa 72MW na utahusisha ujenzi wa kituo kimoja cha umeme cha Homa Bay na upanuzi wa vituo vya Sondu na Awendo. Mkandarasi wa mradi huu ni CG Holdings ya Ubelgiji na mradi unatarajiwa kukamilika mwaka wa Inakadiriwa utagharimu Kshs. 2.3 bilioni. Inatarajiwa kuwa ukamilikapo utaimarisha mtandao ulioko sehemu ya Homabay na pia utachangia ukuzaji wa sekta ya samaki. iii) Kituo cha umeme cha Mariakani 400/220KV Mradi huu unahusu ujenzi wa kituo cha umeme chenye uwezo wa 4x200MVA. Gharama ya mradi ni Ksh. 2.7 bilioni na unafadhiliwa na AfDB.Mradi unatarajiwa kukamilika Agosti (iv) Mradi wa kuimarisha umeme wa Ethiopia- Kenya Mradi unahusu ujenzi wa wa kituo cha umeme chenye uwezo wa 2x450MVA eneo la Isinya swichi eneo la Athi River na Nairobi Kaskazini. Mradi unaofadhiliwa na Benki ya Dunia na unatarajiwa kwa gharama ya Ksh4.5 bilioni.mradi unatarajiwa kukamilika Septemba VI Miradi iliyopendekezwa ya 5,000 + MW ya haraka a) Menengai - Soilo; Urefu wa 13km wa aina ya saketi mbili na kituo cha umeme cha 200MVA eneo la Soilo. Mradi huu unafadhiliwa na Serikali ya Kenya na itagharimu Ksh. 0.8 bilioni.epc ambao ndio wakandarasi wa laini ya kusambaza umeme na vituo vya umeme wameshapewa kandarasi na mradi huu unatarajiwa kukamilika ifikapo Desemba 2014 ili kusafirisha umeme kutoka kiwanda cha kusaga nishati cha 90MW cha Menengai. b) Menengai - Rongai; Laini hii ya urefu wa 30km wenye uwezo wa 400kV wa saketi mbili na kituo cha umeme cha 400/220kV - 200MVA maeneo ya Menengai na Rongai. Mradi huu utatarajiwa kugharimu Kshs. 3.2 bilioni na unalengwa kukamilika Juni 2016 ili kusafirisha umeme kutoka kiwanda cha kuokoa nishati cha 90MW cha Menengai. Mkurugenzi mkuu wa KETRACO Mhandisi Joel Kiilu akizungumza na wathiriwa wa laini ya kusambaza umeme ya Olkaria- Suswa. c) Silali - Rongai; Laini hii ni ya 150km 400kV ya seketi mbili iliyo na kituo cha umeme cha 400/11kV - 350MVA kaika eneo la Silali. Makadirio ya gharama ni Ksh 5.6 bilioni na unalengwa kukamilika Juni 2016 na utasafirisha umeme kutoka kiwanda cha Silali cha 200MW. 46

49 d) Dongo Kundu - Mariakani; Laini hii ya 50km 400kV ya saketi mbili inakadiriwa kugharimu Ksh. 4.0 bilioni unalengwa kukamilika Julai 2015 na utasafirisha umeme kutoka kwa mradi wa LNG wenye uwezo wa 700MW. e) Lamu- Kitui -Nairobi Mashariki; Laini hii ya 520km 400kV ya saketi mbili unakadiriwa kugharamu Ksh bilioni na unalengwa kukamilika Desemba 2016 kusafirisha umeme kutoka kwa 960MW Kitui na 960MW Lamu ambayo ni mitambo ya makaa ya mawe na uwezo wa nyongeza. f) Isinya -Nairobi Mashariki; Laini hii ni ya 75km 400kV ya saketi mbili yenye uwezo wa kituo cha umeme cha 400/220kV-350MVA eneo la Nairobi Mashariki. Inakadiriwa kuwa mradi huu utagharimu Ksh. 4.3 bilioni na unalengwa kukamilika Oktoba Mradi huu utasafirisha umeme nyongeza. VII Miradi Inayohitaji Ufadhili KETRACO imebainisha laini za kusambaza umeme na hadi wakati huu miradi hii inahitaji fedha au haijapata wafadhili wowote. Baadhi ya laini hizo ni zile zenye lengo la kuimarisha mitandao ya usambazaji katika Maua, Maralal, Migori/ Isabenia, Lunga Lunga na Chogoria. Zingine zitawezesha vituo vya pekee kama vile Hola, Bura, Habaswen na Wajir viweze kujiunga kwenye Gridi ya Taifa na kuongeza upatikanaji wa umeme kwa lengo la kuimarisha maendeleo katika sehemu za nyanjani. Miradi hio ni pamoja na ifuatayo: a) Laini ya kusambaza umeme ya Meru - Maua; Yenye urefu wa 50km na uwezo wa 132kV. Ina saketi moja na itasafirisha 73MW. Itahusisha ujenzi wa kituo kipya cha umeme cha Maua na upanuzi wa kituo cha Meru. Gharama ya jumla ya mradi huu pamoja na ya njia ya kupitishia umeme ni Kshs. 1.4 bilioni. Laini hii itafaidi sekta ya kilimo kwa ujumla. b) Laini ya kusambaza umeme ya Nyahururu - Maralal; Ni ya 148km 132kV ya saketi moja na uwezo wa 73 MW na itahusisha ujenzi wa kituo kipya cha Maralal na upanuzi wakile cha Nyahururu. Gharama jumla ya ujenzi wa laini na gharama ya njia ya haki inakadiriwa kuwa Kshs. 2.1 bilioni. Watakaofaidika ni pamoja na wamiliki wakubwa wa mashamba ya mifugo na pia viwanda vya uzalishaji wa umeme kwa njia ya miale ya jua wanaotarajiwa katika sehemu ya Mararal. c) Laini ya kusambaza umeme ya Awendo - Migori / Isabenia ; Ni ya 50km 132kV ya saketi moja yenye uwezo wa 73MW na utahusisha ujenzi wa kituo kipya cha umeme cha Migori/ Isabenia na upanuzi wa kituo cha Awendo. Gharama ya jumla ya ujenzi na gharama ya njia ya haki inakadiriwa kuwa Kshs. 1.4 bilioni. Mradi huu utachangia ukuaji wa sekta ya sukari na pia kutoa nafasi kwa biashara ya umeme ya Kikanda na sehemu za kaskazini mwa Tanzania d) Laini ya kusambaza umeme ya Garsen - Hola - Bura - Garissa; Ni ya 240km 220kV ya saketi moja na yenye uwezo wa 250MW. Itahusisha ujenzi wa vituo viwili vya umeme Hola na Bura na upanuzi wa vituo vya umeme vya Garsen na Garissa. Jumla ya gharama ya ujenzi wa laini na njia ya haki unakadiriwa kuwa Kshs. 4.2 bilioni. Laini hii itapita sambamba na Mto Tana na hivyo kufungua maeneo kwa ajili ya unyunyuziaji maji mimea, viwanda vya bidhaa za kilimo na kuhifadhi uthabiti wa umeme. e) Laini ya kusambaza umeme ya Galu - Lunga Lunga; Ni ya 60km 132kV ya saketi moja na yenye uwezo wa 73MW. Itahusisha ujenzi wa kituo cha umeme sehemu ya Lunga Lunga na upanuzi wa kituo cha Galu. Jumla ya gharama ya ujenzi na njia ya haki unakadiriwa kuwa Kshs. 1.6 bilioni. Watakaofaidika sana na mradi huu ni sekta ya madini, sekta ya sukari, sekta ya korosho na pia kutoa nafasi kwa biashara ya umeme ya Kikanda na sehemu za kaskazini mwa Tanzania. f) Laini ya kusambaza umeme ya Ishiara - Chogoria; Ni ya 40km 132kV ya saketi moja na yenye uwezo wa 73MW. Itahusisha ujenzi wa kituo kipya Chogoria na upanuzi wa kile cha Ishiara. Jumla ya gharama ya ujenzi na pia njia ya haki inakadiriwa kuwa Kshs. 1.6 bilioni. Mradi huu utawafaidi wakulima. 47

50 Kituo cha umeme cha Garissa ambayo ni sehemu ya laini ya kusambaza umeme ya Rabai- Malindi- Garsen- Lamu g) Laini ya kusambaza umeme ya Garissa - Habaswen - Wajir; Ni ya 330km 220kV ya saketi moja na yenye uwezo wa 250MW. Itahusisha ujenzi wa vituo viwili vipya sehemu ya Wajir na Habaswen na upanuzi wa kituo cha Garissa. Gharama kwa jumla inakadiriwa kuwa Kshs. 7.3 bilioni. Inatarajiwa kuwa usambazaji wa umeme utaimarika sehemu hizo na pia ukuaji wa haraka sekta ya viwanda vya nyama za mifugo katika Kaunti za Garissa na Wajir. h) Laini ya kusambaza umeme ya Voi -Taveta; Ni ya 107km 132kV ya saketi moja yenye uwezo wa 80MW. Mradi huu utahusisha ujenzi wa kituo cha umeme cha Taveta yenye laini ndogo za 33kV. Jumla ya gharama Inakadiriwa kuwa Ksh. 2.6 bilioni. Laini hii itafaidi wakulima wa mkonge, kilimo cha maua na ufugaji. i) Laini ya kusambaza umeme ya Rabai - Bamburi - Shanzu - Mtwapa Kilifi; Ni ya 60km 132kV ya saketi mbili kutoka Rabai hadi Bamburi, 132kV ya saketi moja hadi Kilifi na bei za 132kV Rabai na vituo vya umeme viwili Bamburi na Mtwapa. Mradi huu unakadiriwa kugharimu Ksh 2.7 billion. Laini hii itanufaisha utalii katika eneo hilo. j) Laini ya kusambaza umeme ya Suswa - Ngong; Laini ya 40km 220kV na upanuzi wa kituo cha umeme Utagharimu Ksh. 2.1 bilioni. Laini hii itakuwa muhimu sana katika kusafirishia umeme kutoka kwenye miradi wa upepo wa Ngong na maeneo jirani. k) Laini ya kusambaza umeme ya Kabarnet - Rumuruti; Laini ya 111km, 132kV na upanuzi wa kituo cha umeme utagharimu Ksh. 1.9 bilioni. Umeme wa kuaminika utasaidia kukuza utalii katika Kaunti ya Baringo na kusadia uokoaji wa umeme wa majani katika kaunti hiyo. 48

51 l) Laini ya kusambaza umeme ya Narok - Bomet; Laini ya 88km 132kV na upanuzi wa kituo cha umeme utagharimu Ksh. 1.7 bilioni. Laini hii itanufaisha sekta ya kilimo. VIII Miradi Inayopangiwa Upembuzi KETRACO inafanya upembuzi yakinifu kushughulikia sehemu za Gridi ya Taifa zilizo na udhaifu ili kuboresha upenyaji wa umeme katika maeneo mbalimbali ya nchi. Upembuzi huu unafanywa na washauri wafuatao: 1. M/s Feedback Infra Private Limited ya India imepewa kandarasi ya upembuzi ya miradi ifuatayo. a) Laini ya kusambaza umeme ya Isinya Konza (38km 400kV) Ni ya 400kV, saketi mbili na itaunganisha mji wa teknologia wa Konza kwenya Gridi ya Taifa na hasa vituo vya uzalishaji umeme vya Olkaria, Menengai na Ethiopia kupitia laini ya Suswa Isinya. Pia laini hii itaunganisha sehemu hii na vituo vya uzalishaji umeme vya Mombasa na kaskazini mwa Tanzania kupitia kituo cha Isinya. Pia inatarajiwa licha ya kutoa njia mbadala kwa ajili ya usambazaji wa umeme, laini hii inahakikishia umeme wa kutosha kwa mji wa Konza kwa zaidi ya miaka 20. b) Laini ya kusambaza umeme ya Longonot - Thika - Kangundo - Konza (205km 400kV) Ni ya 205km 400kV za saketi mbili na ni sehemu ya kukamilisha ule mradi wa 400kV Mzunguko wa Nairobi kwa vile sasa utaunganisha sehemu ya kaskazini ya mradi huo kuanzia kituo cha umeme cha Suswa (Longonot), ukipitia nje kidogo ya kaskazini mwa Nairobi na kumalizikia Konza. Laini hii itaungana na kiungo cha kusini cha mradi wa Mzunguko wa Nairobi kupitia Konza - Isinya - Suswa. Zaidi ya kuimarisha Gridi ya Taifa pia utatoa hakikisho la kuaminika la usalama ama N-1. c) Laini ya kusambaza umeme ya Kamburu - Embu (Kutus) - Thika Ni ya196km, 220kV pamoja na uanzishwaji / upanuzi wa vituo vya umeme katika maeneo ya Kamburu, Embu, Kiganjo & Thika. d) Laini ya kusambaza umeme ya Kitui - Mutomo - Kibwezi Ni ya144km, 132kV pamoja na uanzishwaji wa vituo vya umeme maeneo ya Kitui, Mutomo na Kibwezi. e) Laini ya Ngong - Magadi Ni ya 84km,132kV na kituo kipya cha umeme Magadi. f) Laini ya Uplands - Limuru Kuanzishwa kwa kituo cha umeme cha 132/33 kv eneo la Uplands. 2. M/s AF Consult ya Uswizi imepewa kandarasi ya kufanya upembuzi kwa ajili ya miradi ifuatayo. a) Laini ya kusambaza umeme ya Kisumu - Kakamega - Musaga (70km 220kV) Ni ya 220kV ya saketi mbili na itahakikisha kwamba sehemu za Kakamega na Musaga zitapata njia mbadala ya kuaminika huku pia ikisaidia laini ya 132kV kutoka Lessos na Tororo. b) Laini ya kusambaza umeme ya Webuye - Kimilili - Kitale Wawakilishi wa Lahmeyer International na wa KETRACO baada ya kutia saini kandarasi ya kufanya upembuzi yakinifu kushughulikia sehemu za Gridi ya Taifa zilizo na udhaifu. Ni 73km, 132kV pamoja na uanzishwaji / na upanuzi wa vituo vya umeme maeneo ya Webuye, Kimilili na Kitale. 49

52 c) Laini ya kusambaza umeme ya Kakamega Kaimosi Ni ya 25km, 132kV, pamoja na uanzishwaji / upanuzi wa vituo vya umeme maeneo ya Kakamega na Kaimosi. d) Laini ya kusambaza umeme ya Sotik - Kilgoris Ni ya 48km, 132kV na kituo kipya cha umeme Kilgoris. 3. M / s Lahmeyer International ya Ujerumani a) Laini ya kusambaza umeme ya Mzungoko ya Menengai - Kilgoris - Ziwa Victoria Ni ya 235km, 220kV au 400kV wenye uwezo wa kuunganishia Tanzania kukamilisha Gonga la Ziwa Victoria. c) Laini ya kusambaza umeme ya Myanga - Busia ni ya 41km 132kV na vituo vya umeme. mahitaji yake ya nishati. b) Laini ya kusambaza umeme ya 152km 220kV Isiolo - Maralal Laini hii itatumika kama mbadala wa laini ya kusambaza kutoka miradi ya baadaye ya upepo, jua na mvuke katika mikoa ya katikati ya Bonde la Ufa na gridi ya taifa. c) Laini ya kusambaza umeme ya 306km 220kV Isiolo - Marsabit na upanuzi wa vituo vya umeme maeneo ya Isiolo na Marsabit. d) Laini ya kusambaza umeme ya 188km 400kV Loiyangalani - Marsabit Lini hizi mbili zitasaidia katika kuimarisha uwezo kamili wa rasilimali ya upepo kaskazini mwa Kenya kwa kuunganisha mashamba ya upepo yenye uwezo kwa gridi ya taifa. e) Laini ya 228km 220kV Turkwel - Lodwar- Lokichogio pamoja na uanzishwaji / upanuzi wa vituo vya umeme maeneo ya Turkwel, Lodwar na Lokichogio. d) Laini ya kusambaza umeme ya Rangala - Bondo Ndigwa Ni ya 72km,132kV pamoja na uanzishwaji / upanuzi wa vituo vya umeme maeneo ya Rangala, Bondo na Ndigwa e) Laini ya kusambaza umeme ya Homa Bay - Sindo Ni ya 72km, 132kV kutoka Homa Bay kwa Sindo kupitia Karungo. e) Laini ya kusambaza umeme ya Ndhiwa - Karungu Bay 72km, 132kV na upanuzi wa vituo vya umeme maeneo ya Ndhiwa na Karungu Bay. 4. M/s Power Grid Corporation ya India a) Laini ya kusambaza umeme ya 288km 220kV Kiambere Maua Isiolo Chini ya mradi wa LAPSSET Isiolo imetengwa kwa maendeleo ya mji wa kimataifa wa mapumziko. Laini hii ya 220kV kutoka Kiambere itahakikisha kwamba Isiolo itapokea umeme kutosha kukidhi 50

53 MAFANIKIO MENGINE Kwa kuongezeka kwa utekelezaji wa miradi, Kampuni imepata matokeo ya kuridhisha katika nyanja nyingi kwa kupitia juhudi zetu katika kutekeleza mikakati ya kampuni. Katika kipindi hiki, Wasimamizi wa KET- RACO waliendelea kuimarisha mifumo, sera, miundo na michakato ili kulainisha mikakati yake ya ukuaji wa uchumi. Mafanikio muhimu yamepatikana katika baadhi ya hizi kama ilivyo onyeshwa hapa chini. Wafanyakazi Kwa kutambua kwamba wafanyakazi wema ni muhimu kwa utendaji kazi, Kampuni inajitahidi ili kuhakikisha kuwa kila mfanyakazi amepewa jukumu kulingana na uwezo au ujuzi wake. Ili kuimarisha rasilimali za wafanyakazi, Kampuni inaendelea kujenga uwezo wa wafanyakazi wake kwa kuwasajili katika kozi husika kama zilizoainishwa katika mipango ya mafunzo. Kampuni imeendelea kutekeleza mapendekezo ya ripoti tathmini ya kazi ambayo imewezesha KETRACO kuweka wafanyakazi waki sambamba na malengo ya kimkakati na kufikia ufanisi wa ndani na usawa wa kikazi. KETRACO inaamini kwamba kuajiri ufanisi na mafunzo ya kuendelea ni muhimu kwa mafanikio yake. Katika mwaka husika, wafanyakazi 37 zaidi waliajiriwa na kusababisha kuongezeka kwa idadi ya wafanyakazi kutoka 128 hadi 165 mwishoni mwa mwaka. Ngazi ya uwezo maendeleo pia iliongezeka kutoka 69% hadi 71% katika kipindi hicho. Mipango ya ustawi wa wafanyakazi pia iliendelea kuangaliwa upya ili kuhakikisha kwamba KETRACO bado ipo katika ushindani wa ajira. Utafiti wa kuhusu kuridhika kwa wafanyakazi uliofanywa mwishoni mwa mwaka ulionyesha kuwa asilimia imeongezeka kutoka 80.3 % katika mwaka uliopita hadi 82%. Ili kuhakikisha utofauti na sera za jinsia wafanyakazi walihamasishwa vilivyo kupitia njia ya warsha. Maswala ya usawa na kijinsia yaliimarishwa wakati ajira kwa uwiano wa kijinsia ilikuwa 33%. Aidha, mpango wa kuhusisha walemavu kazini pia ulitekelezwa na wafanyakazi kuhimizwa kupitia warsha za kuwafahamisha na kuhamasishwa. Usawa wa kijinsiapia uliimarishwa wakati wa kuajirikwa uwiano jinsia kuwa katika 33% kwa wanawake. Aidha, uhamasishaji wa ulemavu ulifanyika kwa wafanyakazi. Watu wenye ulemavu walipewa nafasi sawa wakati wa ajira. Uendeshaji kupitia Ufundi mitambo Kampuni ina nia ya kuendelea kuwekeza katika mbinu za miundombinu ya ubora wa mitambo yetu ya teknologia na mawasialiano (ICT) ili kuimarisha shughuli zetu za utoaji wa huduma. Kufikia lengo hili, laini zetu zote za kusambaza umeme zinaundwa zikichanganya pia uwezekano wakubeba nyuzi aina ya fibre (Optical Ground Wire -OPGW) ili kuwezesha matumizi ya mawasilaino ya kindani aina ya Supervisory Control & Data Acquisition and Energy Management System Wafanyakazi wa KETRACO baada ya kushiriki mbio za Standard Chartered 51

54 (SCADA / EMS). Nyuzi aina ya fibre ambazo kampuni haitaweza kutumia zitaweza kukombolesha kwa kampuni za tovuti nchini. Usimamizi wa Utendaji KETRACO kama shirika tuna amini na kupendekeza kwamba ni muhimu kipimo cha juhudi na utendajikazi wetu kiwe cha juu. Kwa hivyo usimamizi wa utendaji ni muhimu kwa utambuzi wa malengo ya kampuni na ili yaweze kulainishwa na kazi katika vitengo vyote vya kampuni. Mkataba wa tatu wa Utendaji kwa kipindi 2012/2013 ulisahihishwa kati ya Bodi na Serikali. Nafurahi kutoa taarifa kwamba wakati wa tathmini ya mwaka ya 2012/13, utendaji wa Kampuni yetu uliweza kupewa matokeo ya kiwango cha nzuri sana. Cheti cha ISO Kampuni imepata mafanikio makubwa kuhusu cheti cha ISO. Katika kipindi cha mwaka ukaguzi wa ndani wa Quality Management System ulikuwa na mafanikio na uliofanywa na wakaguziwa ndani na pia Kenya Bureau of Standards kwa mtiririko huo. Kwa sababu hiyo,kampuni ilipewa cheti cha ISO kuthibitishwa na ISO-9001: 2008 na Kenya Bureau of Standards. Mbinu mpya za utoaji Huduma Ili kuunganisha deta ya cadastral, deta ya waathiriwa wa miradi deta za utafiti wa angani na Mfumo wa kijiografia(gis); na kuunganisha deta ya waathiriwa na malipo ya fidia katika mfumo mmoja, Kampuni ilianzisha rasimu ya hadidu za rejea kwa njia za kupitishia umeme. Ushahidi wa dhana ulifanywa na kampuni mbili zilizo chaguliwa na kuwasilishwa kwa Kamati ya Usimamizi wa kampuni. Mfumo huu ni tayari kwa ajili ya utekelezaji Maswala ya kijamii KETRACO, kama mashirika mengine, inawajibika kuhakikisha kwamba miradi yote inatekelezwa kwa njia ambazo zinawahusisha jamii zinazoathirika kwa njia ya kuzungumza nao katika maeneo ya miradi yote. Kampuni imewezesha kuweko kwa mkataba wenye maelezo na majukumu yanayofuatwa kikamilifu katika shughuli zote zakuhusu maswala ya kijamii. KETRACO huhakikisha kwamba miradi yote inatekelezwa kupitia mchakato wa mashauriano na wadao. Kampuni, zaidi huhakikisha kwamba shughuli zake zinafanywa kuzingatia mazoea bora kwa kuzingatia kwamba ujenzi wa laini za usambazaji umeme zinaweza kudhuru mazingira na mahitaji ya ardhi kwa ajili ya vituo vya umeme na njia ya haki vina lazimu wadau wengine wauze mashamba yao. SHUKRANI Ningependa kuwashukuru wadau, ikiwa ni pamoja na Serikali yetu, washirika wa maendeleo au wafadhili, washauri, wakandarasi, jamii zinazohusishwa na miradi yetu na hasa wafanyakazi, kwa ushirikiano na msaada wao wakati wa mwaka wa 2012/2013. Hatungewaza kupata mafanikio tuliyoangazia kwa ripoti hii kama sio kwa ushirika wenu. Tunapolenga kuharakisha maendeleo ya miundombinu ya usambazaji wa umeme,kampuni ina matumaini kuwa mwaka ujao, miradi mbalimbali ambayo inatekelezwa itakamilika na mengine imepangiwa kwa ajili yautekelezaji. Pamoja na kuendelea kufanya kazi kwa pamoja, ushauri na ushirikiano,kampuni imebaki kimkakati ikilenga kuelekea utoaji umeme wenye ubora, wa kuaminika na salama kama ilivyo kusudiwa katika ajenda ya kitaifaya maendeleo. Mhandisi Joel Kiilu Mkurugenzi Mei 2, 2014 Wafanyakazi wa KETRACO wanakata keki kusherehekea siku ya kuzaliwa ya wenzao 52

55 CORPORATE GOVERNANCE STATEMENT Corporate governance is the framework used to direct and manage the business affairs of the Company towards enhancing prosperity and corporate accountability with the ultimate objective of realising shareholders long term value while taking into account the interest of other stakeholders. The Directors are responsible for the corporate governance practices of the Company. This Statement sets out the main practices in operation during the year under review. Board of Directors The Board of Directors has nine members comprising the Managing Director and eight non-executive directors, including the Chairman. Although incorporated under the Companies Act, Cap 486, the Company is governed under the provisions of the State Corporations Act, Cap 446 by virtue of the Company being wholly owned by the Government. The non-executive directors are independent within the meaning of the Capital Markets Authority s Guidelines on Corporate Governance. Information on directors profiles is shown on pages 8-9. Separation of Functions The Chairman and the Managing Director play separate roles in the governance structure of the Company. The Chairman is primarily responsible for the running of the Board and ensuring that it is supplied in a timely manner with sufficient information to enable it to discharge its duties. The Managing Director is responsible for recommending business plans and the budget to the Board, implementing approved corporate strategies and day to day administration of the Company. The primary responsibilities of the Board include: Defining the vision and mission statements of the Company elucidated in a corporate strategic plan which defines and sets the strategic objectives and goals of the Company; establishment of short and long term goals and ensuring preparation of interim and annual financial statements; review and approval of the annual budgets; review of the financial performance of the Company; monitoring performance periodically; managing risks by ensuring that the Company has devised and implemented adequate systems of internal controls together with appropriate monitoring of compliance thereof; and working with management to realise mandate of the Company. There are deliberate measures and plans in place for all Directors to receive appropriate training and to take independent professional advice if necessary. New directors are also well inducted by provision of necessary information pertinent to the Company s business, meetings with Management and training. In this regard, Directors attend training on good corporate governance by the Centre for Corporate Governance to enhance their skills. The Board also attended various workshops on audit and risk management during the period. There is diverse mix of skills and gender parity in the board, as is shown from the profile of directors elsewhere in this Report which outlines their professional qualifications and experience. The Board met in accordance with requirements of the business. The Board held a total of 15 meetings during the year, which were very well attended. Attendance of Board Meetings Name Attendance 1 Mr. Justus Kageenu 15 2 Mr. Patrick Nyoike, PS, MOE) 5 3 Eng. Joel Kiilu 15 4 Mr. Daniel K. Mwaura 13 5 Hon. Jafaar Sheikh (ceased ) 7 6 Mrs. Felister Kivisi (Alternate Director to Mr. Joseph Kinyua, PS, Treasury) 14 7 Eng. Julius Mwathani (Alternate Director to Mr. Patrick Nyoike, PS, MOE) 8 Mrs. Elizabeth W. Maina 13 9 Mrs. Patience K. Nyaoga Ms. Esther N. M ithiria Mr. Fidesius Nyaga - (Appted ) 8 Board Committees The following Board Committees were in place during the period under review year:

56 Audit & Risk Committee The Audit & Risk Committee was reconstituted on 29 th April, 2013 and is in line with Treasury Circular No. 16/2005 on establishment and operationalization of audit committees in the Public Service. The Committee comprised four non-executive directors and is chaired by a non-executive director. The members of the Committee during the period under review were: 1. Mr. Daniel Mwaura-(Chairman) 2. Hon. Jafaar Mohammed - ceased Mrs. Felister Kivisi 4. Ms. Esther Nkatha 5. Mr. Fidesius Nyaga Name Attendance 1 Mr. Daniel K. Mwaura -Chair 3 Hon. Jafaar Mohammed- 2 (Ceased ) 3 3 Esther Nkatha 3 4 Mrs. Felister Kivisi 3 The Audit & Risk Committee held 3 meetings during the period which were well attended. The Committee routinely invites the Managing Director, and at times the other key staff to attend the meetings. The Manager, Internal Audit is the Secretary to the Committee. Staff & Remuneration Committee The Board has constituted a Staff & Remuneration Committee whose mandate includes determining the terms and conditions of service of staff and approval of recommendations for appointment and disciplinary issues of senior staff. The Audit & Risk Committee Board Members at Rabai Substation during an audit trip of the 220kV Rabai- Malindi- Garsen- Lamu Project The members who served in the Committee were as follows: 1. Mrs. Elizabeth W. Maina ( Chairperson) 2. Eng. Julius Mwathani (Alternate Director to Eng. Joseph Njoroge, PS, MOE&P) 3. Mr. Daniel K. Mwaura 4. Mrs. Patience Nyaoga 5. Eng. Joel Kiilu When appropriate, the Committee invites other members of the Board and staff to its meetings. The Committee held 4 meetings during the period under review. Staff & Remuneration Committee Name Attendance 1 Mrs. Elizabeth W. Maina 4 2 Mr. Daniel K. Mwaura 4 3 Mrs. Patience Nyaoga 4 4 Eng. Julius Mwathani 3 5 Eng. Joel Kiilu 4 DIRECTORS REMUNERATION Remuneration of Directors is determined by the appointing authorities in line with recommendations of the State Corporations Advisory Committee. There were no directors loans at any time during the year. INTERNAL CONTROLS The Company has systems and processes to ensure requisite internal controls, physical security of assets and reporting of accurate and up to-date information. Whereas the Board has overall responsibility for the systems of internal control which are fully embedded in the operations of the Company, certain responsibilities, such as review of the effectiveness of the internal control systems are delegated to the Audit and Risk Committee of the Board. Internal controls comprise of methods and procedures adopted by Management to provide reasonable assurance in safeguarding assets, prevention and detection of errors, accuracy and completeness of accounting records together with reliability of financial statements. An integrated Enterprise Resource Planning system is also under consideration to replace the interim IT software accounting system which is in place. 54

57 ACCOUNTABILITY AND AUDIT Directors responsibilities in relation to financial statements The Company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company as at the end of the financial year and of the profit or loss of the company for that period. The Directors are responsible for ensuring that suitable accounting policies are consistently applied supported by reasonable and prudent judgements and estimates and those applicable accounting standards are followed. The Directors have responsibility for ensuring that the company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act and the State Corporations Act. They also have general responsibility for the systems of internal control for safeguarding the assets of the Company and to prevent and detect fraud and other irregularities. COMMUNICATION WITH STAKEHOLDERS The Company places a great deal of importance on open communication with its stakeholders. This is achieved through press releases, updates posted on the Company website and circulation of audited financial statements on an annual basis. Shareholders also have an opportunity to dialogue with the Board of Directors and Management during annual general meetings. Open forums are also organised with development partners and other stakeholders to discuss progress of on-going and planned projects. MAJOR STAKEHOLDERS In the course of doing business, the Company takes cognizance and fully engages with the following major stakeholders: the Government of Kenya through the Ministry of Energy & Petroleum and The National Treasury; Funding and Development partners including the World Bank; African Development Bank (AfDB); Agence Française de Développement (AFD); European Investment Bank (EIB); JICA; Exim Bank of China; Kreditanstalt für Wiederaufbau (KfW) and Exim Bank of India. Others include the Kenya Power; Kenya Electricity Generating Company Limited (KenGen); Geothermal Development Company Limited (GDC); Rural Electrification Authority, (REA) Energy Regulatory Commission (ERC); Independent Power Producers (IPPs) and other electricity sub-sector players. Dr. Kenneth Sigilai CHAIRMAN 2 nd May

58 REPORT OF THE DIRECTORS The directors have pleasure in presenting their report together with the audited financial statements of Kenya Electricity Transmission Company Limited (the company ) for the year ended 30 June 2013 which show its state of affairs. PRINCIPAL ACTIVITIES The principal activity of the company is to design, construct, operate and maintain electricity transmission infrastructure that forms the backbone of the Kenya s National Transmission Grid, build interconnectors to facilitate regional power trade, and to wheel electricity to The Kenya Power and Lighting Company Limited and other end users from generators who produce power in bulk. RESULTS Sh 000 Profit before taxation 491,356 Taxation charge (200,062) Profit for the year transferred to revenue reserve 291,294 ====== DIVIDENDS The directors do not recommend the payment of a dividend (2012 Nil). DIRECTORS The current Board of Directors is as shown on pages 6 and 7. Dr. Kenneth Sigilai was appointed chairman of the Board with effect from 10th January 2014 replacing Mr. Justus Kageenu. Mr. Fidesius Nyaga was appointed a director with effect from 18 December Mr. Henry Rotich and Eng. Joseph Njoroge became directors in May and June 2013 by virtue of their appointment as the Cabinet Secretary, the National Treasury and Principal Secretary, Ministry of Energy and Petroleum respectively. The two replaced Mr. Joseph Kinyua and Mr. Patrick M. Nyoike who ceased being directors after vacating their positions as the Permanent Secretary to the Treasury and Permanent Secretary, Ministry of Energy respectively. AUDITORS The Auditor General is responsible for the audit of the company s statutory financial statements in accordance with Section 14 of the Public Audit Act, Section 39(1) of the Act empowers the Auditor General to appoint other auditors to carry out the audit on his behalf. Accordingly, Deloitte & Touche were appointed to carry out the audit for the year ended 30 June 2013 and report to the Auditor General. BY ORDER OF THE BOARD Mr. Duncan Macharia Company Secretary 2 nd May

59 STATEMENT OF DIRECTORS RESPONSIBILITIES The Companies Act Cap 486 requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the operating results of the Company for that year. It also requires the directors to ensure the Company keeps proper accounting records which disclose with reasonable accuracy the financial position of the Company. They are also responsible for safeguarding the assets of the Company. The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and the requirements of the Kenyan Companies Act, and for such internal controls as directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgements and estimates, in conformity with International Financial Reporting Standards and in the manner required by the Kenyan Companies Act, Cap 486. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The directors further accept responsibility for the maintenance of accounting records which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control. Nothing has come to the attention of the Directors to indicate that the Company will not remain a going concern for at least the next twelve months from the date of this statement. Signed for and on behalf of the Board by:- DR. KENNETH SIGILAI CHAIRMAN ENG. JOEL M. KIILU MD & CEO 57

60 REPORT OF THE INDEPENDENT AUDITORS REPUBLIC OF KENYA REPORT OF THE AUDITOR-GENERAL ON FOR THE YEAR ENDED 30 JUNE 2013 REPORT ON THE FINANCIAL STATEMENTS The accompanying financial statements of Kenya Electricity Transmission Company Limited set out on pages 59 to 90, which comprise the statement of financial position as at 30 June 2013, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory information have been audited on my behalf by Deloitte and Touché, auditors appointed under Section 39 of the Public Audit Act, The auditors have duly reported to me the results of their audit and on the basis of their report, I am satisfied that all the information and explanations which to the best of my knowledge and belief, were necessary for the purpose of the audit were obtained. Management s Responsibility for the Financial Statements The management of Kenya Electricity Transmission Company Limited is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The management is also responsible for the submission of its financial statements to the Auditor-General in accordance with the provisions of Section 13 of the Public Audit Act, Auditor-General s Responsibility My responsibility is to express an opinion on these financial statements based on the audit and report in accordance with the provisions of Section 15 (2) of the Public Audit Act, 2003 and submit the audit report in compliance with Article 229 (7) of the Constitution of Kenya. The audit was conducted in accordance with International Standards on Auditing. Those standards require compliance with ethical requirements and that the audit be planned and performed to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements present fairly, in all material respects the financial position of the Company as at 30 June 2013, and of its financial performance and its cash flows for the year then ended, in accordance with International Financial Reporting Standards and comply with Companies Act, Cap 486 of the Laws of Kenya. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS As required by the Kenya Companies Act, I report based on my audit, that; i) I have obtained all the information and explanations which to the best of my knowledge and belief, were necessary for the purpose of the audit; ii) In my opinion, proper books of account have been kept by the Company, so far as appears from my examination of those books; and, iii) The Company s statement of financial position and statement of comprehensive income are in agreement with the books of account. Emphasis of the Matter Without qualifying my opinion, I draw your attention to the matter referred under note 3(b) of the financial statements. The company bills Kenya Power and Lighting Company ( KPLC) Limited for electricity wheeling services using postage stamp method. However, there is no formal agreement between the Company and KPLC on the billing method to be used. During the year under review, the company billed electricity wheeling services amounting to Kshs.466,423,027 based on the postage stamp method to KPLC. However, only Kshs.161,473,730 has been recognized as revenue in the financial statements in accordance with IAS 18 resulting in a difference of Kshs.304,949,279 between the billed wheeling revenue and the recorded wheeling revenue. Revenue has been recognized to the extent determined by KPLC using the embedded cost model. Edward R. O. Ouko, CBS AUDITOR-GENERAL Nairobi 18 March

61 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE Notes Sh 000 Sh 000 WHEELING REVENUE 161, ,807 DIRECT EXPENSES 3 (a) (209,061) (167,240) GROSS (LOSS)/PROFIT (47,587) 147,567 OTHER INCOME 4 1,103, ,912 ADMINISTRATIVE EXPENSES (517,600) (458,789) DOUBTFUL DEBTS PROVISION 3 (b) (47,095) (591,780) PROFIT BEFORE TAXATION 5 491,356 57,910 TAXATION CHARGE 7 (200,062) (23,608) PROFIT FOR THE YEAR 291,294 34,302 OTHER COMPREHENSIVE INCOME FOR THE YEAR - - TOTAL COMPREHENSIVE INCOME FOR THE YEAR 291,294 34,302 ======== ======== 59

62 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE Notes Sh 000 Sh 000 ASSETS Non current assets Property, plant and equipment 8 35,386,749 21,454,069 Intangible asset 9 21,091 23,133 Deferred tax asset 10 56, ,134 35,464,472 21,597,336 Current assets Corporate tax receivable 7(c) 58,126 - Trade and other receivables , ,604 Cash and bank balances 7,909,492 6,967,291 8,223,271 7,145,895 Total assets 43,687,743 28,743,231 ======== ======== EQUITY AND LIABILITIES Capital and reserves Share capital 12 2,000 2,000 Revenue reserves 1,176, ,360 1,178, ,360 Non-current liabilities Deferred grant income 13(c) 37,780,517 23,248,728 Current liabilities Deferred grant income 13(c) 144, ,544 Trade and other payables 14 4,583,744 4,442,445 Corporate tax payable 7(c) - 34,154 4,728,572 4,607,143 Total equity and liabilities 43,687,743 28,743,231 ======== ======== The financial statements on pages 56 to 86 were approved and authorised for issue by the board of directors on 29 November 2013 and were signed on its behalf by: MR. JUSTUS KAGEENU CHAIRMAN ENG. JOEL M. KIILU MD & CEO 60

63 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2013 Share Revenue Total capital reserve equity Kshs 000 Kshs 000 Kshs 000 At 1 July , , ,058 Total comprehensive income for the year - 34,302 34,302 At 30 June , , ,360 ======= ======= ======== At 1 July , , ,360 Total comprehensive income for the year - 291, ,294 At 30 June ,000 1,176,654 1,178,654 ======= ======= ======== 61

64 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2013 Cash flows from operating activities Sh 000 Sh 000 Cash generated from operations ,584 2,912,159 Taxation paid 7(c) (228,840) (118,362) Net cash generated from operating activities 367,744 2,793,797 Cash flows from investing activities Additions to property, plant and equipment 8 (14,110,324) (9,303,644) Purchase of intangible assets 9 (6,120) (10,299) Net cash used in investing activities (14,116,444) (9,313,943) Cash flows from financing activities Dividends paid - (20,000) Grants received 13(b) 14,690,901 7,465,394 Net cash generated from financing activities 14,690,901 7,445,394 Increase in cash and cash equivalents 942, ,248 Cash and cash equivalents at beginning of year 6,967,291 6,042,043 Cash and cash equivalents at end of year 7,909,492 6,967,291 ========== ========= Represented by: Cash in hand and bank balances 7,909,492 6,967,291 ========== ========= 62

65 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE ACCOUNTING POLICIES Statement of compliance The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). For the purposes of reporting under the Kenyan companies Act, in these financial statements the balance sheet is represented by the statement of financial position and the profit and loss account is equivalent to the statement of profit or loss. Adoption of new and revised International Financial Reporting Standards (IFRS) i) Relevant new standards and amendments to published standards effective for the year ended 30 June 2013 The following relevant new and revised IFRSs were effective in the current year and had no material impact on the amounts reported in these financial statements. Amendments to IFRS 7 Disclosures Transfers of Financial Assets Amendments to IFRS 1 Severe Hyperinflation Amendments to IAS 1 Presentation of Items of Other Comprehensive Income The amendments to IFRS 7 increase the disclosure requirements for transactions involving transfers of financial assets. These amendments are intended to provide greater transparency around risk exposures of transactions where a financial asset is transferred but the transferor retains some level of continuing exposure in the asset The application of the amendment had no effect on the company s financial statements as the company did not transfer any such financial assets during the year. The amendments regarding severe hyperinflation provide guidance for entities emerging from severe hyperinflation either to resume presenting IFRS financial statements or to present IFRS financial statements for the first time The amendments had no effect on the company s financial statements as the company is not a first-time adopter of IFRS. The amendments to IAS 1 introduce new terminology for the statement of comprehensive income and income statement. Under the amendments to IAS 1, the statement of comprehensive income is renamed the statement of profit or loss and other comprehensive income and the income statement is renamed the statement of profit or loss. The amendments to IAS 1 retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to IAS 1 require items of other comprehensive income to be grouped into two categories in the other comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis the amendments do not change the option to present items of other comprehensive income either before tax or net of tax. The application of the amendments had no effect on the company s financial statements during the financial year other than adoption of the new statement title. 63

66 ii) Relevant new and amended standards and interpretations in issue but not yet effective in the year ended 30 June 2013 Effective for annual New and Amendments to the standards periods beginning on or after IFRS 9, Financial Instruments 1 January 2015 IFRS 10, Consolidated Financial Statement 1 January 2013 IFRS 11, Joint Arrangements 1 January 2013 IFRS 12, Disclosure of Interests in Other Entities 1 January 2013 IFRS 13, Fair Value Measurement 1 January 2013 IAS 19 (as revised in 2011), Employee benefits 1 January 2013 IAS 27, Separate Financial Statements (as revised in 2011) 1 January 2013 IAS 28, Investments in Associates and Joint Ventures (as revised in 2011) 1 January 2013 Amendments to IFRS 7, Disclosures Offsetting Financial Assets 1 January 2013 and Financial Liabilities Amendments to IFRS 9 and IFRS 7, Mandatory Effective Date of 1 January 2015 IFRS 9 and Transition Disclosures Amendments to IFRS 10, IFRS 11 and IFRS 12 Consolidated Financial Statements, 1 January 2013 Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance IAS 32, Financial Instruments: Presentation Amendments to application guidance on 1 January 2014 the offsetting of financial assets and financial liabilities Annual Improvements to IFRSs Cycle 1 January 2013 iii) Impact of relevant new and amended standards and interpretations on the financial statements for the year ended 30 June 2013 and future annual periods IFRS 9, Financial Instruments IFRS 9 issued in November 2009 introduces new requirements for the classification and measurement of financial assets. IFRS 9 amended in October 2010 includes the requirements for the classification and measurement of financial liabilities. IFRS 9 requires all recognised financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at their fair values at the end of subsequent accounting periods. 64

67 NOTES TO THE FINANCIAL STATEMENTS (Continued) 1 ACCOUNTING POLICIES (continued) The most significant effect of IFRS 9 regarding the classification and measurement of financial liabilities relates to the accounting for changes in fair value of a financial liability (designated as at fair value through profit or loss) attributable to changes in the credit risk of that liability. Specifically, under IFRS 9, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive income, unless the recognition of the effects of changes in the liability s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability s credit risk are not subsequently reclassified to profit or loss. Previously, under IAS 39, the entire amount of the change in the fair value of the financial liability designated as at fair value through profit or loss was recognised in profit or loss. IFRS 9 is effective for annual periods beginning on or after 1 January 2015, with earlier application permitted. The directors anticipate that IFRS 9 will be adopted in the company s financial statements for the annual period beginning 1 January 2015 and that the application of IFRS 9 may have a significant impact on the amounts reported in respect of the company s financial assets and financial liabilities (e.g the company will classify financial assets as subsequently measured at either amortised cost or fair value). However, it is not practical to provide a reasonable estimate of the effect until a detailed review has been completed. IFRS 13, Fair Value Measurement IFRS 13 replaces the guidance on fair value measurement in existing IFRS accounting literature with a single standard. The IFRS is the result of joint efforts by the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) to develop a converged fair value framework. The IFRS defines fair value, provides guidance on how to determine fair value and requires disclosures about fair value measurements. However, IFRS 13 does not change the requirements regarding which items should be measured or disclosed at fair value. IFRS 13 applies when another IFRS requires or permits fair value measurements or disclosures about fair value measurements (and measurements, such as fair value less costs to sell, based on fair value or disclosures about those measurements). With some exceptions, the standard requires entities to classify these measurements into a fair value hierarchy based on the nature of the inputs: iii) Impact of relevant new and amended standards and interpretations on the financial statements for the year ended 30 June 2013 and future annual periods (Continued) 65

68 NOTES TO THE FINANCIAL STATEMENTS (Continued) 1 ACCOUNTING POLICIES (continued) IFRS 13, Fair Value Measurement Level 1 quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2 inputs other than quoted market prices included within level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 unobservable inputs for the asset or liability. IFRS 13 is effective for annual periods beginning on or after 1 January 2013, with earlier application permitted. The directors anticipate that IFRS 13 will be adopted in the company s financial statements for the annual period beginning 1 July 2013 and that the application of the new Standard may affect the amounts reported in the financial statements and result in more extensive disclosures in the financial statements, however, the company is yet to asses IFRS 13 full impact and intends to adopt the standard not later than the accounting period beginning on or after 1 January Deferred Tax: Recovery of Underlying Assets (Amendments to IAS 12) This amends IAS 12, Income Taxes, to provide a presumption that recovery of the carrying amount of an asset measured using the fair value model in IAS 40, Investment Property, will normally be through sale. As a result of the amendments, SIC-21, Income Taxes Recovery of Revalued Non-Depreciable Assets, would no longer apply to investment properties carried at fair value. The amendments also incorporate into IAS 12 the remaining guidance previously contained in SIC-21, which is accordingly withdrawn. The above amendments are generally effective for annual periods beginning on or after 1 January The company will apply this amendment prospectively. The directors anticipate no material impact on the company s financial statements currently as the company does not have investment properties. However, the company would have to apply this standard to any such arrangements entered into in the future. IAS 19 (as revised in 2012)- Employee Benefits The amendments to IAS 19 change the accounting for defined benefit plans and termination benefits. The most significant change relates to the accounting for changes in defined benefit obligations and plan assets. The amendments require the recognition of changes in defined benefit obligations and in fair value of plan assets when they occur, and hence eliminate the corridor approach permitted under the previous version of IAS 19 and accelerate the recognition of past service costs. The amendments require all actuarial gains and losses to be recognised immediately through other comprehensive income in order for the net pension asset or liability recognised in the statement of financial position to reflect the full value of the plan deficit or surplus. 66

69 NOTES TO THE FINANCIAL STATEMENTS (Continued) 1 ACCOUNTING POLICIES (continued) The amendments to IAS 19 are effective for annual periods beginning on or after 1 January 2013 and require retrospective application with certain exceptions. The directors anticipate that the amendments to IAS 19, when adopted, will have no impact on the company s financial statements as the company does not have defined benefit plans. (iv) Early adoption of standards The company did not early-adopt any new or amended standards in the year. Basis of preparation The financial statements are prepared under the historical cost convention as modified to include the revaluation of certain assets. The principal accounting policies adopted in the preparation of these financial statements remain unchanged from the previous year and are set out below. Revenue recognition Government grants are recognised as income over the period necessary to match them with the related costs which they are intended to compensate on a systematic basis. The main source of revenue is wheeling charge for transmitting electricity from the producer (source) to a substation to facilitate distribution to the final consumer. The wheeling charge is measured based on kilowatt hours (KWH) of power transmitted and is recognised upon delivery of electricity. Revenue from rendering the service is recognised when all the following conditions are satisfied: the amount of revenue can be measured reliably; it is probable that the economic benefits associated with the transaction will flow to the company; the stage of completion of the transaction at the end of the reporting period can be measured reliably; and the costs incurred for the transaction and the costs to complete the transaction can be measured reliably. Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset s net carrying amount on initial recognition. Exchequer funding Exchequer funding for capital expenditure is recorded when received and then accounted for as deferred grant income. This is credited to the statement of comprehensive income as part of other income on a straight- line basis over the expected useful life of the related assets. 67

70 NOTES TO THE FINANCIAL STATEMENTS (Continued) 1 ACCOUNTING POLICIES (continued) Exchequer funding for revenue expenditure is recorded when received. It is accounted for as income through profit or loss in the period when the related expenditure is incurred. Taxation Current taxation is provided on the basis of the results for the year as shown in the financial statements, adjusted in accordance with the tax legislation. Deferred tax is provided using the liability method for all temporary differences arising between the tax base of the assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax rates are used to determine deferred income tax. Deferred tax assets are recognised for tax losses carried forward only to the extent that realisation of the related tax benefit can be foreseen. Property, plant and equipment Property, plant and equipment are stated as cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation is calculated on straight line method to write-off the cost of property, plant and equipment in equal annual instalments over their estimated useful lives. Depreciation is calculated from the date of purchase of an asset, using the following annual rates: Capital work in progress Nil Transmission line 2.5% Motor vehicles 25% Furniture, fittings and office equipment 12.5% Computers & accessories 33.3% An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset at the disposal date) is included in profit or loss in the year the asset is derecognised. The asset s residual values, estimated useful lives and methods of depreciation are reviewed at the end of each reporting period with the effect of any changes in estimate accounted for on a prospective basis. Intangible assets Costs incurred on computer software are initially accounted for at cost as intangible assets and subsequently at cost less any accumulated amortisation and accumulated impairment losses. Amortisation is calculated on the straight line basis over the estimated useful lives not exceeding a period of 3 years. 68

71 NOTES TO THE FINANCIAL STATEMENTS (Continued) 1 ACCOUNTING POLICIES (continued) Accounts receivables Trade receivables are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Objective evidence of impairment of the receivables is when there is significant financial difficulty of the counter party or when there is a default or delinquency in payment according to agreed terms. When a trade receivable is considered uncollectible it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. Trade payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade payables are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method. Employee benefits costs (i) Retirement benefit obligations Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. The scheme is funded by contributions from both the company and employees. The company and all its employees also contribute to the National Social Security Fund, which is a defined contribution scheme. In addition the company pays gratuity to top management on contract. The gratuity is paid at the end of the contract period at the rate of 15% and 31% of the total basic salary over the contract period. An accrual is made for gratuity based on the rate of 15% and 31% pa. Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions. (i) Other entitlements The estimated monetary liability for employees accrued leave entitlement at the reporting date is recognised as an expense accrual. 69

72 NOTES TO THE FINANCIAL STATEMENTS (Continued) 1 ACCOUNTING POLICIES (continued) Foreign currencies The financial statements are presented in Kenya Shillings, which is the company s functional and reporting currency. In preparing the financial statements, transactions in currencies other than the entity s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetary items are recognised in profit or loss in the period in which they arise. Comparatives Where necessary, comparative figures have been reclassified to conform to changes in presentation in the current year. 2 CRITICAL JUDGEMENTS IN APPLYING THE ENTITY S ACCOUNTING POLICIES In the application of the company s accounting policies, which are described in note 1 above, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised if the revision affects only that period or in the periods of the revision and future periods if the revision affects both current and future periods. The following are areas where management has made major assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Impairment losses At each reporting date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash generating unit to which the asset belongs. 70

73 NOTES TO THE FINANCIAL STATEMENTS (Continued) 2 CRITICAL JUDGEMENTS IN APPLYING THE ENTITY S ACCOUNTING POLICIES (Continued) Property and Equipment Property and equipment is depreciated over its useful life taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed at the reporting date and may vary depending on a number of factors. In reassessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. Contingent liabilities The directors evaluate the status of any exposures on a regular basis to assess the probability of the company incurring related liabilities. However, provisions are only made in the financial statements where, based on the directors evaluation, a present obligation has been established. 3 EXPENSES (a) Direct Expenses Sh 000 Sh 000 Depreciation cost for transmission lines 148, ,544 Maintenance cost for transmission lines 60,873 36,696 (b) Doubtful debts provision 209, ,240 ======== ======= The doubtful debts provision is as a result of disputed billings. The company billed Kenya Power and Lighting Company Ltd (KPLC) based on the Energy Regulatory Commission (ERC) approved transmission tariff of Kshs 0.77 per Kwh multiplied by the units generated and wheeled through the transmission lines owned by the company. However, KPLC proposes to use the embedded cost model that incorporates the length of the transmission line in the computation of wheeling charge payable to the company. The company does not recognise revenue on disputed billings until the underlying dispute is resolved and it is probable that the billed amounts will be collected. Billings that had been previously recognised but subsequently disputed are provided for pending dispute resolution. The provision for amounts disputed in the current year amounts to Sh 47,095,000 (2012: Sh 591,780, 197). The prior year provision includes disputed amounts relating to 2011 and

74 NOTES TO THE FINANCIAL STATEMENTS (Continued) 4 OTHER INCOME Sh 000 Sh 000 Exchequer funding for recurrent expenditure 302, ,000 Interest Income 653, ,292 Deferred grant income amortisation 144, ,544 Miscellaneous Income 3,123 6,076 1,103, ,912 ======== ======= Interest income relates to interest earned on the bank account balances and it is subject to 15% withholding tax. Other income represents income received from sale of tender documents. 5 PROFIT BEFORE TAXATION The profit before taxation is arrived at after charging/(crediting): Sh 000 Sh 000 Staff costs (note 6) 366, ,591 Directors emoluments - fees 9,252 8,241 - other 10,189 24,361 Depreciation (note 8) 177, ,512 Amortisation (note 9) 8,162 5,320 Auditors remuneration 3,000 2,750 Loss on disposal of property, plant and equipment ======= ======= 6 STAFF COSTS Sh 000 Sh 000 Salaries and wages 312, ,459 Other staff costs 32,062 46,705 Leave pay provision 2,669 6,808 Pension contribution 13,489 10,878 Gratuity provisions 4,695 3,456 NSSF and NHIF contributions , ,591 ======= ======= 72

75 NOTES TO THE FINANCIAL STATEMENTS (Continued) 7 TAXATION Sh 000 Sh 000 (a) Taxation charge Prior year (overcharge)/undercharge current tax (52,251) 6,372 Corporation tax on separate sources of income 188, , , ,660 Deferred taxation (note 10) - current year (26,798) (228,412) - prior year under provision 90, ,360 63,502 (116,052) (b) Reconciliation of taxation charge to expected taxation based on accounting profit before taxation 200,062 23,608 ======== ======= Accounting profit before taxation 491,356 57,910 ======== ======= Taxation at the applicable rate 30% 147,407 17,373 Tax effect of non-deductible expenses 112,027 39,368 Tax effect of revenue not taxable (134,108) (151,865) Prior year undercharge/(overcharge) current tax (52,251) 6,372 Additional tax assessment relating to prior year 36,687 - Prior year deferred tax provision 90, ,360 (c) Taxation (recoverable)/payable 200,062 23,608 ======== ======= Balance brought forward 34,154 8,774 Charge for the year 136, ,660 Paid during the year (228,840) (118,362) Instalment tax penalty - 4,082 (58,126) 34,154 ======== ======= 73

76 NOTES TO THE FINANCIAL STATEMENTS (Continued) 8 PROPERTY, PLANT AND EQUIPMENT Cost Transmission Motor Furniture, fittings Accessories Capital work Total lines vehicles & office furniture computer in progress Sh 000 Sh 000 Sh 000 Sh 000 Sh 000 Sh 000 At 1 July ,655,628 37,723 69,344 9,518 5,666,219 12,438,432 Additions - 14,525 22,261 12,539 9,254,319 9,303,644 Transfers from transmission lines * (1,433,887) ,433,887 - Disposal (459) - (459) At 30 June 2012 and At 1 July ,221,741 52,248 91,605 21,598 16,354,425 21,741,617 Additions - 3,746 1, ,104,339 14,110,324 Transfer to transmission lines** 1,151,956 (14,525) - (1,241) (1,136,190) - Disposal (230) - (230) At 30 June ,373,697 41,469 93,032 20,939 29,322,574 35,851,711 Depreciation At 1 July ,635 12,218 9,746 2, ,250 Charge for the year 130,544 11,480 10,673 6, ,512 Eliminated on disposal (214) - (214) At 30 June 2012 and At 1 July ,179 23,698 20,419 9, ,548 Charge for the year 148,188 9,851 11,937 7, ,635 Eliminated on transfer - (2,744) - - 2,744 - Eliminated on disposal (221) - (221) At 31 June ,367 30,805 32,356 16,690 2, ,962 Net book value At 30 June ,991,330 10,664 60,676 4,249 29,319,830 35,386,749 ======== ======= ======== ======= ======== ======== At 30 June ,987,562 28,550 71,186 12,346 16,354,425 21,454,069 ======== ======= ======== ======= ======== ======== 74

77 At the date of incorporation, various transmission lines were transferred from Kenya Power and Lighting Company Limited to the company. This has been included in the transmission lines for which legal documentation to transfer ownership is yet to be completed at cost Sh 5,221,740,000 (2012: Sh 5,221,740,000) and net book value: Sh 4,848,317,000 (2012: Sh 4,978,861,000). *This is a reversal from transmission lines to work in progress relating to items that had been wrongly capitalised in the period ended 30 June ** These are capital work in-progress, computer and motor vehicle transfers relating to Mumias- Rangala line completed in the year 9 INTANGIBLE ASSET Computer software Sh 000 Sh 000 Cost At 1 July 29,919 19,620 Additions 6,120 10,299 At 30 June 36,039 29,919 Amortisation At 1 July 6,786 1,466 Charge for the year 8,162 5,320 At 30 June 14,948 6,786 Net book value At 30 June 21,091 23,133 ======== ======= 10 DEFERRED TAX ASSET The net deferred tax asset is attributable to the following items: Tax losses 42, ,653 Excess depreciation over capital allowances 5,121 8,368 Leave pay provision 4,831 4,030 Staff gratuity provision 4,491 3,083 56, ,134 ======== ======== 75

78 NOTES TO THE FINANCIAL STATEMENTS (Continued) Movement in deferred tax account is as follows: Sh 000 Sh 000 At beginning of the year 120,134 4,082 Profit or loss credit (note 7) 26, ,412 Prior year under provision (90,300) (112,360) At end of the year 56, ,134 ======== ======== 11 TRADE AND OTHER RECEIVABLES Sh 000 Sh 000 Wheeling charge due from KPLC 208, ,613 Provision for doubtful receivables (47,095) (591,780) Net wheeling charge due from KPLC 161, ,833 Medical and insurance prepayments 13,667 9,059 Rent deposit 3,311 3,311 Other receivables 77,201 36, , ,604 ======= ======= 12 SHARE CAPITAL Share capital 2,000 2,000 Issued capital comprises: ====== ====== 20,000 fully paid ordinary shares of Shs 100 each (2012: 20,000) 2,000 2,000 ====== ====== The ordinary shares carry one vote each 76

79 NOTES TO THE FINANCIAL STATEMENTS (Continued) 13 DEFERRED GRANT INCOME These relate to grants from the Government of Kenya used for the construction of transmission lines that are being amortised to profit or loss over the useful lives of the related assets. (a) Deferred grant income reconciliation Sh 000 Sh 000 Direct component* Deferred grant income brought forward 11,156,479 7,667,627 Received in the year 2,496,000 3,512,000 Amortisation (37,433) (23,148) Deferred grant income brought forward 13,615,046 11,156,479 ========= ======== Indirect component** Deferred grant income brought forward 12,222,793 8,376,795 Received in the year 12,194,901 3,953,394 Amortisation (107,395) (107,396) Deferred grant income brought forward 24,310,299 12,222,793 ========= ======== *The direct component relates to grant received directly from Government of Kenya **The indirect component relates to loans repayable by the Government of Kenya from other financiers. 77

80 NOTES TO THE FINANCIAL STATEMENTS (Continued) 13 DEFERRED GRANT INCOME (Continued) (b) Total reconciliation Sh 000 Sh 000 Deferred grant income brought forward 23,379,272 16,044,422 Additions 14,690,901 7,465,394 Amortisation (144,828) (130,544) Deferred grant income carried forward 37,925,345 23,379,272 ======== ======== (c) Amounts will be amortised as below : Grant income to be amortised within one year 144, ,544 Grant income to be amortised after one year 37,780,517 23,248,728 At the end of the period 37,925,345 23,379,272 ======== ======== 14 TRADE AND OTHER PAYABLES Sh 000 Sh 000 Trade payables 308, ,233 Accruals 4,275,718 4,025,212 4,583,744 4,442,445 ======== ======== The accruals mainly relate to amount payable to the contractor in relation to the construction on Nairobi- Mombasa line outstanding at year end. 78

81 NOTES TO THE FINANCIAL STATEMENTS (Continued) 15 CASH GENERATED FROM OPERATIONS Shs 000 Shs 000 Reconciliation of profit before tax to cash generated from operations: Profit before taxation 491,356 57,910 Adjustments for: Depreciation charge on property, plant and equipment (note 8) 177, ,512 Amortisation of intangible assets (note 9) 8,162 5,320 Amortisation of deferred grant income (note 13 (b)) (144,828) (130,544) Loss on disposal Changes in working capital: Decrease/(increase) in trade and other receivables (77,049) 439,179 Increase in trade and other payables 141,299 2,380,537 Cash generated from operations 596,584 2,912,159 ======= ======== 16 RELATED PARTIES The Government of Kenya is the principal shareholder in Kenya Electricity Transmission Company Limited holding 100% equity interest. The Government also holds 50% and 70% of the equity interest in The Kenya Power and Lighting Company Limited (KPLC) and Kenya Electricity Generating Company Limited (KenGen) respectively. The company is related to KPLC and KenGen through common shareholding. During the year, the following transactions were carried out with related parties as analysed as follows:- 79

82 NOTES TO THE FINANCIAL STATEMENTS (Continued) 16 RELATED PARTIES (Continued) Transactions with related parties are detailed as follows:- (i) Government of Kenya Shs 000 Shs 000 Deferred Grants 12,194,901 3,953,394 Exchequer funding for recurrent expenditure 302, ,000 Government of Kenya grants 2,496,000 3,512,000 14,993,123 7,845,394 ======== ======== (ii) The Kenya Power and Lighting Company Limited Included in trade payables: Payable against maintanance 130,714 73,727 Included in trade receivables Wheeling charges receivable 208, ,613 Provision for bad debts (47,095) (591,780) 161, ,833 ======== ======= 80

83 NOTES TO THE FINANCIAL STATEMENTS (Continued) 16 RELATED PARTIES (Continued) (iii) Key management compensation The remuneration of directors and other members of key management during the year was as follows: Shs 000 Shs 000 Salaries and other benefits 76,571 84,502 ======= ====== Directors fees and emoluments (included in key Management compensation above) 19,440 32,602 ======= ====== 17 FUTURE OPERATING LEASE RENTAL PAYABLE Amounts payable by the company under various operating lease agreements negotiated with landlords as at the year end were as follows: Shs 000 Shs 000 Within one year 14,379 13,865 In the second to fifth years inclusive 30,275 30, FINANCIAL RISK MANAGEMENT 44,654 44,140 ====== ======= The company s activities expose it to a variety of financial risks including credit and liquidity risks and effects of changes in foreign currency. The company s overall risk management programme focuses on unpredictability of changes in the business environment and seeks to minimise the potential adverse effect of such risks on its performance by setting acceptable levels of risk. The company does not hedge any risks and has in place policies to ensure that credit is only extended to customers with an established credit history. The company s financial risk management objectives and policies are detailed below: (i) Credit risk The company has exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Credit risk arises from cash and cash equivalents, and deposits with banks, as well as trade and other receivables and available-for-sale financial investments. 81

84 NOTES TO THE FINANCIAL STATEMENTS (Continued) 18 FINANCIAL RISK MANAGEMENT (Continued) Management assesses the credit quality of each customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external assessment in accordance with limits set by the directors. The amounts presented in the statement of financial position are net of allowances for doubtful receivables, estimated by the company s management based on prior experience and their assessment of the current economic environment. The carrying amount of financial assets recorded in the financial statements representing the company s maximum exposure to credit risk without taking account of the value of any collateral obtained is made up as follows: At 30 June 2013 Fully performing Past due Impaired Sh 000 Sh 000 Sh 000 Trade receivables 161, ,044 Bank balances 7,909, ======== ======= ======= At 30 June 2012 Trade receivables 129, ,780 Bank balances 6,967, ======== ======= ======== The customers under the fully performing category are paying their debts as they continue trading. The credit risk associated with these receivables is minimal and the allowance for uncollectible amounts that the company has recognised in the financial statements is considered adequate to cover any potentially irrecoverable amounts. The company has significant concentration of credit risk on amounts due from KPLC. The board of directors sets the company s credit policies and objectives and lays down parameters within which the various aspects of credit risk management are operated. 82

85 NOTES TO THE FINANCIAL STATEMENTS (Continued) 18 FINANCIAL RISK MANAGEMENT (Continued) (ii) Liquidity risk management Ultimate responsibility for liquidity risk management rests with the company directors, who have built an appropriate liquidity risk management framework for the management of the company s short, medium and long-term funding and liquidity management requirements. The company manages liquidity risk through continuous monitoring of forecasts and actual cash flows. The table below represents cash flows payable by the company under non-derivative financial liabilities by their remaining contractual maturities at the reporting date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant. At 30 June 2013 Less than 1 month Between 1-3 months Over 5 months Total Sh 000 Sh 000 Sh 000 Sh 000 Trade payables 308, ,626 At 30 June 2012 ======== ======= ======== ======== Trade payables 417, ,233 ======== ======= ======== ======== (iii) Market risk The board has put in place an internal audit function to assist it in assessing the risk faced by the company on an ongoing basis, evaluate and test the design and effectiveness of its internal accounting and operational controls. Market risk is the risk arising from changes in market prices, such as interest rate, equity prices and foreign exchange rates which will affect the company s income or the value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Overall responsibility for managing market risk rests with the Audit and Risk Management Committee. The company s Finance Department is responsible for the development of detailed risk management policies (subject to review and approval by Audit and Risk Management Committee) and for the day to day implementation of those policies. 83

86 NOTES TO THE FINANCIAL STATEMENTS (Continued) 18 FINANCIAL RISK MANAGEMENT (Continued) There has been no change to the company s exposure to market risks or the manner in which it manages and measures the risk. (a) Foreign currency risk The company has transactional currency exposures. Such exposure arises through purchases of goods and services that are done in currencies other than the local currency. Invoices denominated in foreign currencies are paid after 30 days from the date of the invoice and conversion at the time of payment is done using the prevailing exchange rate. The carrying amount of the company s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows: Ksh Others Total Shs 000 Shs 000 Shs 000 At 30 June 2013 Financial assets 1,929,770-1,929,770 Liabilities Trade and other payables 35,485-35,485 Net foreign currency liability 1,594,285 1,594,285 ======= ======= ======= The company manages foreign exchange risk form future commercial transactions and recognised assets and liabilities by projecting for expected sales proceeds and matching the same with expected payments. 84

87 NOTES TO THE FINANCIAL STATEMENTS (Continued) 18 FINANCIAL RISK MANAGEMENT (Continued) Ksh Others Total Shs 000 Shs 000 Shs 000 At 30 June 2013 Financial assets Liabilities Trade and other payables (49,239) - (49,239) Net foreign currency liability (49,239) - (49,239) ======= ======= ======= Foreign currency sensitivity analysis The following table demonstrates the effect on the company s statement of comprehensive income on applying the sensitivity for a reasonable possible change in the exchange rate of the three main transaction currencies, with all other variables held constant. The reverse would also occur if the Kenya Shilling appreciated with all other variables held constant. Change in currency rate Effect on Profit before tax Effect on equity Shs 000 Shs Euro 2012 Euro 10% (1,559) (1,091) Nor Kroner 10% (903) (632) (b) Interest rate risk Interest rate risk is the risk that the company s financial condition may be adversely affected as a result of changes in interest rate levels. The company s interest rate risk arises from bank deposits. This exposes the company to cash flow interest rate risk. The interest rate risk exposure arises mainly from interest rate movements on the company s deposits. 85

88 NOTES TO THE FINANCIAL STATEMENTS (Continued) 18 FINANCIAL RISK MANAGEMENT (Continued) Management of interest rate risk To manage the interest rate risk, management has endeavoured to bank with institutions that offer favourable interest rates. Sensitivity analysis The company analyses its interest rate exposure on a dynamic basis by conducting a sensitivity analysis. This involves determining the impact on profit or loss of defined rate shifts. The sensitivity analysis for interest rate risk assumes that all other variables, in particular foreign exchange rates, remain constant. The analysis has been performed on the same basis as the prior year. Using the end of the year figures, the sensitivity analysis indicates the impact on the statement of comprehensive income if current floating interest rates increase/decrease by one percentage point as a decrease/increase of KShs 6.53 million (2012: KShs 4.4 million ). A rate increase/decrease of 5% would result in a decrease/increase in profit before tax of KShs million (2012 KShs 22.2 million): (iv) Capital management Capital managed by the company is the equity attributable to the equity holders. The primary objective of the company s capital management is to ensure that it maintains healthy capital ratio in order to support its business. The company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders. No changes were made in the objectives, policies or processes during the years ended 30 June 2013 and 30 June The company monitors capital using a gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total of interest bearing loans and borrowings, trade and other payables less cash and cash equivalents. 86

89 NOTES TO THE FINANCIAL STATEMENTS (Continued) 18 FINANCIAL RISK MANAGEMENT (Continued) Sh 000 Sh 000 Trade and other payables (note 14) 4,583,744 4,442,445 Less: cash and short-term deposits (7,909,492) (6,967,291) Net debt (3,325,748) (2,524,846) Equity 887, ,360 Gearing ratio Nil Nil ======= ======= The major factors that impact on the equity of the company include the following: revenue received from wheeling operation and maintenance cost cost of operating the transmission business cost of expanding the business to ensure that capacity growth is in line with electricity demand taxation dividends The company uses Power System Development Planning process, which forecasts long-term growth in electricity demand; evaluates the alternative means to meet and manage that demand and comes up with a Least Cost Power Development Plan. The planning process determines a forward electricity cost curve (the Long Run Marginal Cost), which will give an indication of the size of the price increases that the company requires in order to be sustainable over the medium and long term. Adjustment of the tariffs for the electricity business is regulated and is subject to the process laid down by the Energy Regulatory Commission. The electricity business is currently in the growth phase driven by a rise in demand and Government policy. The funding of transmission capacity is to be obtained from exchequer funding, donor funding from Local and international institutions and cash generated from wheeling business. The adequacy of electricity tariffs allowed by the regulator and the level of Government support are key factors in the sustainability of the company. 87

90 NOTES TO THE FINANCIAL STATEMENTS (Continued) 19 CONTINGENT LIABILITIES (a) On 20 November 2013, The Kenya Revenue Authority issued an assessment of Sh 154,638,043, based on the Local Committee ruling passed on 14 November 2013, in relation to withholding tax on imported services. The company has disputed this assessment and has since given Kenya Revenue Authority a notice of appeal. In the opinion of the directors no liability is expected to crystallise Sh 000 Sh 000 (a) Legal contingent liabilities 5,000 3,000 ===== ===== This amount relates to a legal suit against the company. The petitioners contest the construction of Gibe III dam along Lake Turkana as they fear that it would have a devastating effect on the communities around the lake and their livelihood. The likely outcome of these suits cannot be determined as at the date of signing these financial statements. Based on the information currently available, the Directors believe that the ultimate resolution of these legal proceedings would most likely not have a material effect on the results of the company s operations, financial position or liquidity. 20 CONTINGENT ASSETS The accumulated disputed billings to Kenya Power and Lighting Company Limited relating to wheeling charges amounted to Sh 864,456,547 as at 30 June 2013 (2012: Sh 559,507,250). The dispute relates to the difference in the mode of calculation of the wheeling charges as described in note 3(b). 21 CAPITAL EXPENDITURE COMMITMENTS Sh 000 Sh 000 Authorised and contracted for 14,284,000 11,888,580 Authorised but not contracted for 2,496,000 3,512,000 16,780,000 15,400,580 ======== ======== 22 INCORPORATION The Company is incorporated in Kenya under the Kenyan Companies Act and is domiciled in Kenya. 23 CURRENCY These financial statements are presented in Kenya Shillings (Sh). 88

91 Appendix I DETAILED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE Sh 000 Sh 000 WHEELING REVENUE 161, ,807 OPERATING EXPENSES Depreciation cost for transmission lines 148, ,544 Maintenance cost for transmission lines 60,873 36,696 GROSS (LOSS)/PROFIT (47,587) 167,240 OTHER INCOME Exchequer funding for recurrent expenditure 302, ,000 Interest income 653, ,292 Amortisation of grants 144, ,544 Miscellaneous Income 3,123 6,076 ADMINISTRATIVE EXPENSES 1,103, ,912 Salaries and Wages Other Staff Costs Depreciation Rent Printing and stationery Professional fees Pension Contribution 312, ,459 32,062 46,705 29,446 28,754 18,690 19,221 14,546 12,285 7,048 11,941 13,490 10,878 89

92 Office expenses 11,884 10,654 Board Fees - fees 3,195 8,241 - other 16,246 24,361 Motor Vehicle Expenses 6,029 7,744 Leave pay provision 2,669 6,808 Postage and Telephone and Internet Services 7,415 6,394 Corporate Communication 16,470 6,104 Amortization 8,162 5,320 Gratuity provisions 4,695 3,456 Transport 2,197 3,281 Audit Fees 3,000 2,750 Bank Charges 2,710 2,521 Electricity 2,852 2,815 Security 1, NSSF and NHIF contributions , ,789 Doubtful debts provision 47, ,780 PROFIT BEFORE TAXATION 491,356 57,910 ======= ======= 90

93 A 23MVA Transformer at Lamu Substation.