Kenya firms demand power incentives

July 24, 2009
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, NAIROBI, Kenya, Jul 24 – The government is increasingly being put under pressure to provide incentives to the private sector for more power generation in the country.

Federation of Kenya Employers (FKE) Chairman Eng Patrick Obath told a media briefing on Friday that the power situation in the country is almost reaching crisis level and the involvement of the private sector in production is therefore crucial.

“Instead of the government being the one to drill all the wells and then tell people to generate power, why don’t they license it out like they do oil and let somebody else take the risk. And then make it a minimum requirement that everybody who’s coming in has to develop 200 to 300 Megawatts (MW) each?” he wondered.

He went on to point out that such quantities would make a big impact on industries which are heavily weighed down by high energy costs.

Kenya plans to produce an additional 2,000 MW by 2012 to meet the rising demand for electricity which is estimated to be eight percent per annum but experts have warned that this will only be achieved if all stakeholders are engaged in generation.

FKE’s sentiments came two days after a PricewaterhouseCoopers 2009 Utilities Global Survey showed that 72 percent of private sector firms in various countries desire to have their governments subsidise power generation.

Eng Obath said close attention should particularly be given to small scale power producers who have the potential to contribute about 10 percent of the country’s total consumption.

He suggested a policy change that would strive to have, for example, farmers who have a lot of bio waste in their farms invest in power production and paid handsomely for the little contribution they make to the national grid.

“If all these people put in say one Kilowatt-hour (kWh), five kWh or 10 kWh into the grid, cumulatively then we’ll have a big contribution. And these people will not rely on the weather,” he said in reference to Kenya’s vulnerability due to its overdependence on hydro generated electricity.

Eng Obath added that although the country is bound to depend on emergency power in the next 12 months, all stakeholders should use that time to put in place investments that will ensure cheaper electricity.

As he spoke, President Mwai Kibaki was in Nyanza Province commissioning the 60MW Sondu Miriu hydro power station.

The President spoke of the need to exploit other sources of electricity such as wind, solar and biomas. But while pundits acknowledge that efforts are being made, they are in agreement that these activities need to be fast tracked.

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