The Kenya Association of Manufacturers (KAM) has welcomed the 15% reduction in power tariffs in the country gazetted on 7th January, 2022. In a statement released by KAM Chairperson Mucai Kunyiha, KAM is optimistic that manufacturers shall enjoy a cost reduction of between Ksh. 2.67 and Ksh. 3.64 per unit of electricity, depending on their respective tariff and consumption levels. The cost of power shall further reduce for industries that meet the Time of Use Tariff threshold, as gazetted.
Mr. Kunyiha termed this as a significant milestone towards realizing KAM’s efforts to reduce power costs, boost local manufacturing and consequently, investments in the sector. The Association has in the past raised concerns over the high cost of electricity in the country, which impacts the overall cost of production.
Over the past few years, high cost of electricity has been attributed to various factors, including expensive Purchase Power Agreements (PPAs), high cost of fuel, multiple taxes and levies imposed on electricity bills, VAT and Fuel Cost Adjustment. The increase was also attributed to depressed demand growth and inefficiency in the system despite the increased power generation capacity, among others.
Achieving overall sustainable and stable policies on the cost, availability, and reliability of power is paramount to the country’s economic growth. “We support the government’s efforts to address the fuel cost component that is one of the key factors in energy costs, as well as, the expensive petro-thermal generation, whose cost is greatly affected by fluctuating global prices and exchange rates. We remain committed to promoting the competitiveness of local industries. We will continue to engage the government and other stakeholders towards achieving overall sustainable and stable policies on the cost, availability, and reliability of power,” read part of the statement by Mr. Kunyiha.