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Manufacturers laud 15pc cut in electricity cost

Kenya Power workers fix a transformer at Ndimaini Village in Karatina, Nyeri on December 28, 2020. [Kibata Kihu, Standard]

Manufacturers have welcomed the 15 per cent reduction in power tariffs gazetted last week, describing it as a significant milestone.

Kenya Association of Manufacturers (KAM) said in a statement that members will enjoy a cost reduction of between Sh2.67 and Sh3.64 per unit of electricity depending on their respective tariffs and consumption levels.

The cost of power will further reduce for industries that meet the Time of Use Tariff threshold as gazetted. “This is a significant milestone towards realising our long-standing efforts to reduce power costs, boost local manufacturing and investments in the sector,” said KAM Chair Mucai Kunyiha in a statement.

Mr Mucai said manufacturers have in the past raised concerns over the high price of electricity, which has had a negative impact on the cost of production.

Mr Kunyiha said the reduction is timely, especially with the effects of the Covid-19 pandemic still lingering in some sectors.

President Uhuru Kenyatta on December 12, 2021, announced that the cost of power would drop by 30 per cent, with the first phase of 15 per cent expected to be effected by end of that month.

Last week, the Energy Ministry announced a 15 per cent cut on tariffs starting from the December bills. Another 15 per cent reduction is expected in March this year.

The changes were informed by a presidential inquiry into power purchase agreements (PPAs).

Kunyiha attributed high electricity charges to expensive PPAs, high cost of fuel, multiple taxes and levies, fuel cost adjustment and inefficiency in the system.