Power Price Storm As Industry Pushes for Urgent Tariff Reforms

By Robai Ludenyi

Manufacturers in Kenya are turning up the heat on the government over soaring electricity costs, warning that high power bills are choking industries and threatening jobs. Through the Kenya Association of Manufacturers (KAM), industrial players are demanding urgent reforms to bring down electricity tariffs, saying the current pricing structure makes it too expensive to produce goods locally.

At the center of the storm is Kenya Power, the country’s main electricity distributor. Manufacturers argue that power costs in Kenya remain significantly higher than in competing economies, putting local factories at a disadvantage. For businesses that rely heavily on electricity such as cement producers, steel manufacturers, food processors, and textile mills power is not just another bill. It is one of their biggest operating expenses.

Industry leaders say frequent adjustments, extra levies, and unpredictable fuel and forex charges have made planning difficult. Every time tariffs rise, production costs increase. And when production costs go up, the final price of goods also raises pushing Kenyan products out of reach for many consumers and weakening their competitiveness in export markets.

KAM insists that high energy costs are slowing down industrial growth at a time when the country is pushing for more local manufacturing under its economic transformation agenda. If electricity remains expensive, manufacturers warn that some companies may scale down operations, delay expansion plans, or even relocate to countries with cheaper and more stable power.

The association is now pushing for a review of the tariff structure. Among the proposals being floated are reducing pass through costs, renegotiating expensive power purchase agreements, and improving efficiency in electricity transmission and distribution to cut system losses. Manufacturers argue that inefficiencies within the power sector should not be passed on to consumers.

When factories struggle, jobs are at risk. When production slows, supply chains suffer. And when goods become more expensive, households feel the pinch.

Affordable electricity is not a luxury; it is the backbone of a competitive economy. Without decisive action to tame power costs, they warn, Kenya’s manufacturing ambitions could remain just that: ambitions.

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