President Uhuru Kenyatta has met with private sector in Kenya at State House, Nairobi to discuss ways of achieving his manufacturing goal in the ‘Big Four’ by providing cheaper electricity. During a meeting with the Kenya Private Sector Alliance (KEPSA) members, Energy Cabinet Secretary Charles Keter announced a reduction of power tariffs to 9 US cents per kilowatt-hour to boost the manufacturing sector.
Initially, the 9 US cents per kilowatt-hour tariff will apply to companies in the Export Processing Zones (EPZ) in the first instance but likely to be extended to other zones.
Mr Keter said the Government has also taken a decision not to license any thermal power plant or renew the license of stations whose contracts are coming to an end in a move to sustain the low electricity tariffs.
The meeting was a follow up to the 8th Presidential Round Table Forum that brought together stakeholders from government and the Private Sector Alliance (KEPSA). To plug the gap that will be left by the thermal power producers who are exiting the scene, Mr Keter said 310 MW from Turkana Wind plant, 400 MW of hydro power from Ethiopia and 55 MW from Garissa solar plant will be put on the national grid.
“All that will displace the thermal power plant because there is no need to say we are giving you power at 9 cents but that power does not last,” Mr Keter said.
A recent World Bank report ranked Kenya alongside Tanzania and Ethiopia as countries which all increased their electricity access rate by 3% or more annually between 2010 and 2016. The report dubbed Tracking SDG7: The Energy Progress Report noted that Sub-Saharan Africa’s electrification deficit has begun to fall in absolute terms for the first time.
However, despite the increase in access to electricity, achieving a lower cost for manufacturing has remained high. Manufacturing is one of the main agendas of President Uhuru Kenyatta’s second term in office.