KAM raise concerns on proposed increment in electricity tariffs
Kenya Association of Manufacturers(KAM) has raised concern on the proposed increment in electricity tariffs by Kenya Power and Lighting Company(KPLC) effective 01st April,2023.
In a statement by KAM Chairman Mr.Rajan Shah,the increment shall see the manufacturers’ cost of electricity to increase by between Kshs.3.5 and Kes.5 per unit,translating to a 38% cost increase of the output,depending on their respective tariff and consumption levels.”This will roll back the gains made when the cost of power as reduced by 15% in 2021”.Read the Statement from Chairman.
Kenya has one of the highest electricity tarifffs in the region ,currently at average of $0.16 per KWh compred to other African countries exporting products such as South Africa,Egypt($0.03).Morocco,Ethiopia ($0.05) and Tanzania ($0.08).Tariff review that pushes up the cost of electricity will drive production cost even higher for local industries ,rendering the Manufacturing sector uncompetitive .The Statement added.
Manufacturers have over time raised concern over the high cost of electricity in the Country,that impacts on the overall cost of production production.The high cost has been attributed to various factors including expensive Purchase Power Agreements(PPAs);high cost of fuel; multiple taxes and levies imposed on electricity bills,forex,VAT and Fuel cost Adjustments;as well as depressed demand growth-despite the increased power generation capacity,among others.
‘‘Kenya’s competitive postioning on the strength of electricity is being eroded year-on-year despite investiments in renewable energy resources.It is impossible for the Country to be competitive as an investment destination and therefore industrialize in the absence of affordable,reliable,quality and sustainable electricity fo the Manufacturing industry,”Said Shah
However the Assocoation is urging to lower the cost of power to below $0.10 per Unit, and make power stable,readily available to industrial users to promote competitiveness in manufacturing locally and regionally.The burden of in efficiencies in transmission and distribution should not be borne by customers .
‘‘KAM shall engage the Energy and Petroleum Regulatory Authority(EPRA) on the concerns raised as we devote and commit for the reduced cost of power,in line with our advocacy agenda towards sustainable and stable policies ,which are key for driving manufacturing competitiveness”