Kenya turns to Ethiopia to bridge power deficit and reduce the cost of electricity

NAIROBI, Kenya - Ethiopian Electric Power (ECC) Company has agreed to sell power to Kenya under a 25-years agreement.

This new deal will see Kenya purchase power at a rate of $ 6.5 US cents per kilowatt for half a decade.

Under the agreement clause, Kenya Power-local state power agency can only seek a review of the tariff after the end of the 5-years period. This means that the earliest the talks to review can happen is 2027.

Kenya- An east African powerhouse will commence importing power from the Horn of Africa state in November in a bid to bridge the power deficit facing the country as well as reduce the cost of power for the locals.

According to a communique by ECC “Ethiopia would sale this electric power at a price of 6.5 US cents per one-kilo watt for the coming five years having the room of negotiation table concerning tariff adjustment which was requested by Ethiopian Electric Power after five years”.

The new clause will allow tariff renegotiation is a key plank for the State-owned utility to get cheap energy that will then be passed on to consumers in the form of lower bills.

Kenyans have been forced to bear the high tariff cost charged by independent power producers who have to continue squeezing Kenya Power’s ability to lower the cost of electricity.

The state power agency has been unable to effect a 15 percent reduction in charges gazette by former President Uhuru Kenya.

This is after Kenya Power failed to broker a deal with independent power producers to lower the wholesale tariffs.

Kenya Power buys the bulk of electricity from Kenya Electricity Generating Company (KenGen) at Sh5.3 per kilowatt-hour but other IPPs have priced their power as high as Sh195 for the same unit.

KenGen accounts for 70 percent of the electricity supplied to Kenya Power with the 21 IPPs supplying the balance.

The room to renegotiate lower tariffs is key to Kenya Power’s efforts of providing cheaper electricity and easing pressure on homes besides offering investors attractive rates in a bid to make local products more competitive.

Electricity prices jumped 15.7 percent last month reversing the January cuts of equivalent value that were gazetted by the former administration of President Uhuru Kenyatta.

GAROWE ONLINE