The Ministry of Investments, Trade and Industry is advocating for policy reforms that would enable manufacturers and large investors to purchase electricity directly from power producers like KenGen. This initiative seeks to tackle the high electricity tariffs currently affecting Kenya's industrial competitiveness.
Under existing regulations, Kenya Power is the sole distributor and retailer of electricity to consumers. However, during a meeting in Naivasha with county trade executives, Industry Principal Secretary Juma Mukhwana announced the government's intention to revise the national industrialisation policy to facilitate direct power access.
Addressing High Energy Costs and Industrial Migration
Mukhwana highlighted that excessive electricity expenses and double taxation by counties have prompted some industries to relocate to neighboring countries with cheaper power. The proposed reforms aim to allow direct power evacuation from producers to investors, reducing costs and encouraging local manufacturing.
Encouraging Self-Generation of Renewable Energy
The policy review would also permit manufacturers establishing factories to generate their own electricity, particularly from renewable sources such as solar and wind. The government is collaborating with the Energy and Petroleum Regulatory Authority (EPRA) to lower energy costs and boost the manufacturing sector.
Support for County Industrial Parks
In addition, Mukhwana updated on the progress of County Aggregation and Industrial Parks (CAIPs), noting that the national government allocated Ksh250 million to each of the 34 counties, with matching funds expected from counties. Yet, only 16 counties have completed their industrial parks so far.
"We will support the operationalisation of these facilities within the year," Mukhwana said, emphasizing the importance of affordable and reliable power for Kenya's industrialisation and investment goals.
Comprehensive Industrial Policy Overhaul
The revised industrialisation policy will also address other challenges faced by manufacturers, including double taxation, high levies, and costly business permits imposed by some counties.
