Nairobi, Kenya — ESI-AFRICA.COM — 01 June 2011 – Kenya’s power tariffs are expected to rise by about 20% over the next three years, as consumers are drawn in by the government to share in the repayment of new investments in the country’s infrastructure.
Reuters reports that, following the construction of new power plants and transmission lines in east Africa’s biggest economy, consumers will be expected to shoulder the financial burden amid a push to more than double output to about 3,305MW by 2014.
“A rough estimate based on the plants we expect (an extra 1,200MW by 2013) would be 15% for the next three years,” director of economic regulation at the Energy Regulation Commission Frederick Nyang told Reuters in an interview.
“Generation costs account for about two-thirds of the prices: so transmission costs would be about 5%,” he said. About 2,597km of transmission lines are expected by 2013.
High living costs have fanned discontent in Kenya and sparked waves of deadly protests in neighbouring Uganda, with inflation in both countries in double digits.
Nyang said that as regards the June review of tariffs “’ covering the next three years “’ a hike may be postponed to offer some reprieve to Kenyans.
“At the moment I think it would be misguided and insensitive on our part to increase prices,” said Nyang, who is in charge of the review. "I would not want it done for the next quarter.”
Energy costs are already perceived to be high and are just one factor prompting some manufacturers to consider relocating to other countries.
Kenya’s leading power producer KenGen and independent producers are seen ramping up power production by 10 times to 15,000MW annually by 2030 under a government-led initiative.
Local and foreign investors are increasingly attracted to Kenya’s energy sector, especially in renewable energy projects including the 310MW Lake Turkana Wind Power project and Ormat Technologies’ 100MW geothermal plant.