Review of infrastructure, taxes and incentives to boost adoption of EVs

Kenya Power CEO Joseph Siror (right) and Transport manager David Mugambi demonstrate how to charge an electric vehicle at Stima Plaza, Nairobi on April 22, 2024. [Robert Tomno, Standard] During his speech at the just-concluded Third Annual E-Mobility Stakeholders Forum and Expo held in Nairobi, Kenya Power Chief Executive Joseph Siror pointed out how the company's charging stations at Stima Plaza have been busy since their launch in 2024. "I don't know if it is a reflection of adoption or it could be the fact that we do not charge any fee," he said. While figures presented by the E-Mobility Association of Kenya (Emak) President Hezborn Mose and echoed by the Principal Secretary in the State Department for Energy Alex Wachira confirm an increase in the number of electric vehicles (EVs) in the country, almost at 10,000 now, a key point for the sector has been how can consumers be encouraged to take up the electric vehicle (EV) option. The sector is somehow in a catch-22 on whether it is the chicken or the egg that comes first. Should incentives be given to consumers to buy EVs or should infrastructure precede, then motorists will follow. From the expenditure point of view, the cost of fuel and electricity has gone up. However, the increase in the cost of fuel has doubled when compared to that of electricity in the last four years. The cost of 200kWh of electricity now costs Sh5,877.92 according to the April inflation figures by the Kenya National Bureau of Statistics (KNBS). This figure stood at Sh4,518.50 in the same period in 2020. A litre of petrol averaged Sh175.30 in April 2025 when compared to Sh107.57 in 2020. While the cost of petrol has gone up 62 per cent over the period, that of electricity has increased by 30 per cent. As such, adopting an EV is considered a wise idea only but this may seem easier said than done. This isconsidering the expected change in tax regime for EVs in the Finance Bill 2025 that seeks to move them from being zero-rated to VAT-exempt, which could increase their prices. The country's tax regime needs to be re-examined, according to the Emak President, so that more Kenyans can afford not only to own but also operate electric autos. "The battery costs about 40 to 50 per cent of the EV. When you look at the Kenya Revenue Authority, they look at the battery as separate and independent from the EV. We need to look at how we can integrate the two to reduce the actual cost of EVs," he noted. But even as data shows the cost of electricity is lower than that of petrol, Mr Mose speaks of this figure going even lower to accelerate adoption. Kenya has an e-mobility tariff in place by the Energy and Petroleum Regulatory Authority (Epra) that charges Sh16 per kWh during peak hours and Sh8 for off-peak up to a maximum of 15,000 kWh per month, after which the prices go up. He says two buses can consume that amount in two months, and so will 100 motorcycles. "Our proposal is reducing it to Sh12 and Sh6 to just help support the growth of EVs," he said. Mr Mose, who spoke at the event, also pointed out the challenge with charging points, which he said is a pain point for those who have already ditched fossil fuels. Eng Siror said Kenya Power has procured 45 EV chargers that will be stationed in different towns - Nairobi, Mombasa, Voi, Nyeri, Nakuru and Kisumu. Six of these chargers will be positioned at the Jomo Kenyatta International Airport. He acknowledged the cost of electricity as an issue to be addressed, noting that while Epra regulates prices, there are discussions to increase the power imported from Ethiopia. The challenge, he explained, is about electricity consumption during peak hours - between 6pm and 10pm. "If it was to be changed, of course that model could be relooked at and Epra would be the right body to do that, so that in the event that change would result in revenue drop, then that (drop) must be provided elsewhere so that the entire value chain is paid for," explained Eng Siror. Power demand early morning is around 1,400 megawatts (MW), which slightly increases to 1,700MW to 1,800MW by 10am. This goes around until 6pm when the demand now starts rising above 1800MW. "By around 7:30 or 8pm, we are already staring at 2,300MW. That is now the time we have constraints, as far as generation is concerned. And it is the support we require just between 6pm and 10pm," he said. "Outside of that, we have more than adequate power sources." Due to a moratorium placed on new power purchase agreements (PPAs) by the National Assembly in 2023, Kenya Power cannot buy additional electricity from independent power producers (IPPs) even as consumption goes up, necessitating more supply. "Hopefully, by the end of June, we are seeing a very high possibility that Parliament will have lifted the moratorium," said PS Wachira. The PS said the country is ready for EV adoption citing several policies that the government has put in place as the soft infrastructure to entice players in the sector. As a major player in this paddle, the Kenya Power boss describes their role as facilitative, even as he notes that the company is open to partnerships that will spur uptake. For Joy Masinde Mdivo, Kenya Power Board chair, getting into the EV space is something the power distributor needs to do for financial sustainability. "The ideas talked about charging stations and batteries...they are some opportunities for us as a company to have more income generated, not just from distributing power," she said. "I think Kenya Power, for years, has been known to distribute power. As a board, we recognise there are opportunities for us to make more money as a business from investing more in e-mobility." Kenya power is already working with the Kenya Industrial and Research Development Institute (Kirdi) on the possibility of coming up with a battery assembly plant. He said there may be occasions where the private sector or a participant may want to use EVs but they have no infrastructure. At such a point, Kenya Power can step in in collaboration with financiers to provide the said infrastructure. "Ours is really to facilitate," he said. "But we are not competing with the players. Our intention is to spur the uptake of this transition and also to provide a commitment if there are those who are fearing that should I adopt it what will happen, as far as infrastructure is concerned, it is ready." He weighed in on the concern that there is still a challenge of electrification in some areas, a responsibility of Kenya Power, which has been mentioned as a limiting factor to EV adoption. He said a section of innovators have been creative with solutions such as battery swaps that work in the motorcycle sector or players who have erected charging points along the routes they ply such as BasiGo. "But I am not disowning that responsibility. What I am saying is I do not want to go ahead and do something that the private sector would wonder why you didn't allow us to do that. I don't want to create competition. We are here to support," he insisted.

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