Kenyan telecoms market leader, Safaricom, a Vodafone Group affiliate has submitted a proposal to Kenya Power for the installation of a US$300-million smart meter system to fight losses in utility bills.
Per the deal, Safaricom will shoulder the cost of installing 330,000 smart meters for consumers, and on transformers and feeders for revenue assurance.
Reuters reports that Safaricom said it was now waiting for Kenya Power’s response, adding that it would install and operate the smart meter system for eight years if the deal is approved, before transferring it to Kenya Power.
Kenya Power has said it had received the proposal from Safaricom and was reviewing it in line with internal processes.
Like many state-owned power distribution companies in Africa, Kenya Power, the main power distributor in that country, suffers from annual power system losses of 23.46% on its transmission network, well above the global benchmark of 15%.
Indeed, Kenya Power, was once considered a blue chip on the Nairobi bourse, but has slid into the red in recent years partly because of the power system losses, sending its shares close to their all-time lows. The company also has a heavy debt burden.
The system proposed by Safaricom will therefore use the Internet of Things (IoT), which allows real-time monitoring of the grid, to cut the power system losses by eight percentage points in two years, the company said.
Safaricom proposed to split the additional revenue generated from lower system losses, projected at KSh71.7-billion (US$644.21 million) over eight years, with 75% going to Safaricom and 25% to Kenya Power.
In Ghana, the sole state-owned power Electricity Company Ghana also reports huge power leakages through illegal connection, which never gets paid for.
TechGh24 is reliably informed a smart meter company (name withheld) has proposed a fix and a revenue share arrangement to ECG, having shown evidence from a pilot that the meters actually helps to cut down on losses.
At this stage, their proposal has gone through the process all the way to the Energy Minister, but they are yet to get approval to roll out in full gear.
But as Ghana pursues a digital agenda, it would not be out of place to find a leading telco, particularly, the market leader, MTN, which is already pursuing a digital operator/platform agenda, follow the example of Safaricom and make direct investment into helping ECG cut its losses.