Kenya Power to set up new subsidiary for telecoms business

Kenya Power is set to establish a new subsidiary to handle its telecommunications business which includes a fibre optic network laid across the country.

The NSE-listed firm has indicated that it would, in its annual general meeting set for December 22, seek shareholder approval to incorporate the Kenya Power International Limited.

This new company will handle Kenya Power’s telecoms business as well as spearhead the transformation of its energy research institute into a fully-fledged university.

“The purpose of such a subsidiary being to operate and run the business of the company’s telecommunications business unit,” reads one of the proposed special resolutions for the upcoming AGM.

“(The subsidiary will also) actualise the vision of the Institute of Energy Studies and Research towards establishing a university of excellence in the energy sector.”

Kenya Power has since 2010 fixed over 1,800 kilometres of fibre optics along its high-voltage power lines — traversing through 24 of Kenya’s 47 counties — and is seeking to extend this to all regions.

The State-owned utility firm earned Sh259.4 million in revenue in the year ended June from leasing out extra capacity on its fibre optic network, an income line it now intends to grow to Sh1 billion by 2017.

The power firm mainly uses the high-speed Internet network to manage its national grid.

The firm does not, however, use all the capacity and has over the years been leasing out the extra capabilities to mobile telecommunication firms and Internet service providers.

Kenya Power in 2002 was licensed as a network facility provider by the communications sector regulator allowing it to its lease excess broadband capacity to players in the telecoms industry.

Its current customers include Safaricom, Liquid Telecom, Jamii Telecommunications, Wananchi Group and Airtel.

The new subsidiary will also oversee the elevation of the Kenya Power’s Institute of Energy Studies and Research, which is located in Ruaraka, into a regional power training hub.

Kenya Power uses the 58-year-old training institute to meet its internal research and training needs but is now looking to elevate it to becoming a regional centre for training in power generation, transmission, distribution and interconnectivity.

The power distributor in March partnered with the Jomo Kenyatta University of Agriculture and Technology in a deal that will see the two entities collaborate in research, training, and technological innovations.

SOURCE: BUSINESS DAILY