Kenya’s Energy Ministry Slashes Electricity Tariff by 15pct

Kenya’s Energy Ministry has cut electricity tariffs for consumers by 15 per cent stating that it will boost economic growth by reducing the cost of living and reduce the cost of doing business. 

In a statement on Friday, the Ministry said the first tranche of 15 per cent has been effected upon gazettement. This will be reflected in bills covering the end year of 2021. 

The Gazette notice covers the period from January 2022 to December 2022 and will therefore commence in reflecting bills covering the December 2021 period.

“We are working hard at ensuring the next 15 per cent trance is effected in this quarter as promised, The ministry will ensure that this improves our global competitiveness, drives job creation and powers economic growth,” a statement issued read in part. 

“Today, in line with H.E. President Uhuru Kenyatta’s pledge to Kenya, I confirm the gazettement of lower power tariffs by 15pc, effective December 2021,” Amb. Dr Monica Juma, Cabinet Secretary, Ministry of Energy said.

Kenya Power is state-controlled and it is the sole electricity distributor and the bulk of its power comes from Kenya Electricity Generating Company (KenGen). The commission, which is the independent regulator for the sector, sets tariffs for Kenya Power.

In Kenya, high electricity costs and frequent outages have been cited as some of the challenges facing businesses and households. 

With the ongoing reforms in the energy sector, the cost of power will go down from KSh24 per kilowatt to KSh20.4 by end of January.

This is expected to decline further by another 15 per cent to KSh16 per unit by end of March.

Earlier, The Business Daily had reported that Kenya Power had revealed that it could not afford a 15 per cent cut.

“The revenue requirements for the tariff reduction is a sector matter and will not be borne by Kenya Power alone,” it had said after submitting its tariff review request to the Energy and Petroleum Regulatory Authority (Epra).

Kenya Power’s core business is transmission, distribution and retail of electricity purchased in bulk from Kenya Electricity Generating Company Plc (KenGen), Independent Power Producers (IPPs), as well
as imports from Uganda Electricity Transmission Company (UETCL), Ethiopia Electric Utility (EEU) and Tanzania Electric Supply Company Limited (TANESCO).

From its Annual Report and Financial Statements ended 30 June 2021,  it recorded a profit before tax of Shs 8.198 billion (2020: Loss before tax Shs 7.042 billion) and generated positive cash flows from operations of Shs 37.944 billion(2020: Shs 31.497 billion). However, the Company had a net current liability position of Shs 66.479 billion as at 30 June (2020: Shs 74.849 billion).