Industries Will Benefit From Dedicated Power Lines in Kenya

Kenya has promised the top 200 industrial power consumers dedicated direct lines to alleviate frequent power outages, which has led to losses in millions of dollars for manufacturers in the East African country.  “We want to give you better base load power – power which is available at all times,” said Davis Chirchir, Cabinet Secretary for Energy and Petroleum at an investors’ forum organized by Kenya Association of Manufacturers (KAM) and sponsored by Kenya Power Ltd.

Chirchir noted that the country’s expensive power was running industries aground.  He therefore promised more reliable and cheaper power, with Geothermal power expected to add 100MW to the national grid at the end of 2015.  It is part of the planned 5,000 MW projected to be generated from geothermal sources.

Ms. Betty Maina, CEO of the KAM, advised: “Manufacturing has been contributing to GDP growth at around 13 percent but in recent times this has gone down to 8.9 percent and the absence of the expansion in the sector has been constrained by energy.”  She noted that expensive power hinders economic growth, stressing that energy was key to industrialization and poverty eradication.

The event was held as part of a series of road show embarked on by Kenya Power Ltd, which has gone round the country in the past few months to inform the public and stakeholders of plans aimed at improving power in the country.

Unreliable an expensive

Kenya, East Africa’s largest economy has suffered a dip in its manufacturing sector as unreliable, yet expensive power continue to hinder revenue growth, with manufacturers having to spend millions on power.  A 7-hour blackout had in 2013 led to millions in losses. Maina at the time quoted a pharmaceutical company as losing about Sh4 million ($45,766) in the period.

Maina also said, “If you are going to lose Sh4 million ($45,766) with every power blackout that Kenya Power subjects you to, then the generator option begins to look cheap.”  Another company, according to her had to replace equipment worth about Sh500,000 ($5,720) as power surges made their change over system burn out. They also lost sales worth Sh 1.6 million ($18,306).

With losses like this in the manufacturing sector due to unreliable power, the growth of the sector is going to be very slow.  Kenya however hopes this will change as it expedites action in its delivery of sustainable power from every possible source in the country. The East Africa country has explored hydropower, geothermal, coal, natural gas and solar options.

Source: Ventures Africa