- KAM states that the rate, which was Ksh15.8 per kWh in January 2021, has increased to Ksh25.1 per kWh in 2024.
- The Kenya Association of Manufacturers have proposed setting the rate at Ksh10 per kWh.
The Kenya Association of Manufacturers (KAM) has proposed changes in electricity pricing following a hike in the cost of production for its members. In its Manufacturing Priority Agenda (MPA) report for 2024, the employers noted that the cost of electricity had increased significantly within the last year.
According to the report, the cost of electricity had increased by approximately 58 per cent. The association noted that the rate, which was Ksh15.8 per kWh in January 2021, has risen to Ksh25.1 per kWh in 2024.
Some members were spending close to Ksh1 billion on electricity bills, which they would have used to create more employment for Kenyans. Consequently, the manufacturers have proposed setting the rate at Ksh10 per kWh.
The report read in part, “If the government adopts the proposed Ksh 10/kWh, the electricity cost facing the manufacturer can be reduced to Ksh 0.56 billion (a 51% reduction in the cost of electricity). The company can then use the savings to expand the plant, hence hiring more workers and increasing tax contributions or improving cashflow for the business.”
Also, KAM proposed that the government could focus more on generating green energy, which would be cheaper. In particular, they expressed that the increase in geothermal energy generation would be more cost-effective.
The association wants the government to restructure the Time of Use (ToU) to incentivise industries to operate during off-peak hours, such as night hours, when the electricity demand is less.
Furthermore, the manufacturers urged the government to fast-track regulations on power sales from generators directly to manufacturers and lift the existing moratorium on new power plants to open negotiations for new capacity power plants and restore investor confidence.
The report also added that the government should regularise the establishment of the fuel price stabilisation fund by establishing a management structure.