Electricity tarrifs tripple on imports from Uganda to Kenya

Kenya’s payments to Uganda for electricity imports more than tripled to US $35m in the first eight months of the year. This is as a result of a higher tariff and increased purchases from Kampala.

Nairobi is now feeling the impact of a higher tariffs pact the two countries inked in 2014 that puts cross border purchase of electricity at US $0.2 per kilowatt hour (kWh), up from between US $0.08 and US $0.1.

Uganda is making huge profits from the increased sale to Kenya. Kenya imported 168 million kilowatt hours (kWh) in the period compared to 47.7m units in the same eight-month window last year, marking a 252% growth, according to official data.

Kenya paid Uganda about US $10m for power sales in the first eight months of last year. The imports were necessary to serve Western Kenya as drought took a toll on Sondu Miriu hydropower station that supplies the region. At US $0.2, the Uganda power is seven times costlier than hydropower generated from local dams.

Drop in water levels

The country experienced drought last year after low rainfall during the March -June season. As a result, it  drove down water levels in dams and ultimately cut hydro power.

The hydro electricity supply shortfall was plugged by an increase in intake of imports and expensive diesel-fired power, setting up Kenyans for costly energy bills.

Kenya has a direct electricity transmission line connecting with Uganda via Tororo, enabling bulk power imports. Besides Uganda, Kenya also imports power from Ethiopia to feed the neighbouring Moyale town.

Kenya bought 2.4 million units of power from Ethiopia in the year to August. This was up from 1.9 million units in a similar period last year.

Official data shows that Kenya’s electricity exports to Uganda fell 83% to 4.6 million units in the eight months, reversing a trend where the exports have been rising. This denied Kenya an opportunity to gain from the higher tariff of US $0.2 per unit.

Uganda is the largest market for Kenyan goods. Recently she has been pushing for increased sale of its good to its neighbouring countries. Kenya, Uganda and Rwanda plan to build a 400-kilovolt electricity line from Olkaria to Birembo in Rwanda

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