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COST OF ELECTRICITY IN KENYA SET TO GO DOWN

Kenya injects 210 Megawatts into the power grid

210 Megawatts injected into the power grid

Kenyans can now sigh in relief following an announcenement by the government that there will be a 30 percent drop in the cost of electricity in the country starting this month. The cut down is as a result of an injection of 210 megawatts of additional power to the national grid from geothermal production, displacing the more expensive diesel generation.

“By December the fuel charges would have come down by 73%,” said Davis Chirchir,

Cabinet Secretary for Energy adding that the reduction cost of power is expected to save the economy 21 billion shillings annually.

The use of diesel generated power plants have made power costly due to the high fuel prices and the migration to cheaper geothermal power will make the cost of electricity favourable to both consumers and manufacturers. The announcement could not have come at a better time considering the high cost of inflation that Kenyans have been grappling with.  Kenya’s inflation rate stood at 6.68 percent in February 2014.

Since June, the cost of power had hit the roof thanks to inflation and the weakening of the shilling in recent months and dozens of Kenyans hit to the Consumers Federation of Kenya (COFEK) page on Facebook to air their grievances.

Consumers have been paying 48 cents per unit (for inflation adjustment) up from 30 cents per unit.

HIGH COST OF ELECTRICITY NOT GOOD FOR BUSINESS

Other than Nairobi being listed as Africa’s most expensive city to live in according to a survey by the Economist Intelligence Unit (EIU) in August this year, another recent report by the World Bank’s Doing Business 2014 report showed that Kenya’s position in the list of ‘ease of doing business’ had dropped to position 129 from 122 last year.

Kenya ranked poorly in the ease of obtaining electricity connection and cost of electricity areas that contribute in making the country less favourable for investment in the continent.

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