Influence of Risk Factors on Performance of Solar Distribution Projects in Kenya: a Case of Mkopa Solar Company Ltd in Nairobi County

Abstract

Despite the existence of project management in the past decades, researchers have explored this principle only a few years ago. There are many scenarios under which project management is applied. It refers to the main criteria through which the operational and strategic changes are managed in contemporary organizations. Project risks management is considered as a vital tool in project in an organization’s project management. In Kenya, little research exists on the impact of risk factors on project performance in organizations within the off-grid power sector. This study’s general objective was to evaluate the impact of various types of risks on the performance of distribution projects in Nairobi County by Mkopa Solar Ltd. The main research objectives were: To determine how economic risk factors influence performance of distribution projects; to ascertain how regulatory risk factors influence performance of distribution projects; to determine the influence of completion risk factors on performance of distribution projects and to determine the influence of technological risk factors on performance of distribution projects . In order to answer these research questions, the study adopted a descriptive survey design. This study’s target population included Mkopa Solar employees associated the planning, designing, arranging for finance and executing distribution projects in Kenya. A sample size of 108 respondents was selected using stratified random sampling technique to group respondents into eight strata. Structured questionnaires were employed for data collection and data analyzed qualitatively and quantitatively and findings analyzed using descriptive statistics and presented using tables. The response rate obtained from the study was 82 (75.93%) responses were received which was considered sufficient to draw conclusions. The study findings indicated that Mkopa Solarstaff involved in distribution project activities, within Nairobi County, were keenly aware about how project performance was influenced by management of economic, completion, regulatory and technological risks.54 (63.41%) respondents agreed that the organization total revenue after considering project risk factors had improved.52 (63.41%) respondents agreed that there was an increase in the number of subscribers after considering project risk factors. The Likert aggregate mean was 3.62. The study further confirmed that there was a positive correlation between performance of distribution projects and management of economic(beta=0.019,p=0.760), completion(beta=0.313,p=0.000), regulatory(beta=0.253,p=0.131)and technological(beta= 0.253, p=0.038) risks. The study further found that 31 (37.8%) respondents agreed that the organization had instituted systems for effective management of the resources.38 (46.34%) agreed that the organization had quality control systems that ensure the attainment of customer satisfaction. The study further found that an average of 42 (51.22%) and 44 (53.66%) respondents agreed with management of completion risk and technological risk respectively by the existing organizational systems. These findings led to the conclusion that quality control, monitoring and control of distribution projects within Nairobi County needed to be improved from current levels. Furthermore, the management of completion and technological risks needed to improve if performance of distribution projects within Nairobi County is to improve. The study recommends that Mkopa solar improves these risks’management through training of Mkopa solar supervisors, improving procurement systems and enhancing innovative skills through training from within and without. This will ultimately improve performance of distribution projects in Nairobi County.