Nairobi, March 19 : Kenya has been ranked second among African countries with the most expensive electricity prices, According to a Statista report.
The Report, indicates that consumers in Kenya are paying approximately $0.26 (Ksh34) per kilowatt-hour as of June 2024, with Cape Verde being the only other African country with higher prices.
Cape Verde, has topped the list with electricity costs at $0.35 (Ksh45) per kilowatt-hour while Sierra Leone follows Kenya closely at third with household power prices at $0.25 (Ksh32) per kilowatt-hour.
On the other hand, Egypt, Zambia, Angola, and Libya have been ranked among the countries with the lowest electricity prices on the continent.
The report noted that the countries have some of the most favourable energy policies, lower generation costs, and better infrastructure investments.
Despite the high costs, electricity access has been highlighted as a challenge in some regions of Africa.
North Africa enjoys near-universal electricity coverage, while Western, Southern, and Eastern Africa report access rates of just over 50%.
Meanwhile, Central Africa lags behind at around 31%. However, the report notes that some Eastern African nations, including Kenya, have made strides in electricity reliability.
There are multiple factors influencing high electricity prices, including infrastructure costs, government policies, and reliance on expensive energy sources.
Unlike nations such as Iran, Qatar, and Russia, which benefit from lower electricity prices due to abundant crude oil and natural gas production, Kenya largely depends on imported fossil fuels for power generation. This reliance makes it vulnerable to global market fluctuations and higher energy costs.
On the other hand, some European countries, such as Germany and Belgium, face higher electricity prices due to significant tax components. Germany’s electricity rates stand at $0.39 (Ksh50) per kilowatt-hour, while Belgium follows at $0.37 (Ksh48) per kilowatt-hour.
This revelation comes in the wake of a Warning of impending Tarriffs Hike from the Kenya Power and Lightening Company.
Kenya Power recently warned of a potential 30% hike in electricity tariffs, sending ripples across Kenya’s business and industrial sectors.
The warning comes as the state-owned utility braces for additional financial pressures stemming from proposed wayleave charges by county governments.
In a candid disclosure, Kenya Power’s CEO, Joseph Siror, stated that if counties impose the levies, the company would face an additional burden of approximately Sh63.8 billion—equivalent to nearly a third of the utility’s total revenue needs.
This financial strain is expected to trigger a tariff review that could have significant consequences for both large consumers and the broader Kenyan economy.
Wayleave charges are fees imposed by local governments for the right to use public land for infrastructure projects. In the case of Kenya Power, these charges are associated with maintaining and expanding its extensive electricity network.
With 4,032 kilometers of distribution lines in Nairobi alone—and construction costs averaging Sh200 per meter—the annual wayleave claim for the city totals Sh806.4 million.
Although this figure might seem modest in isolation, when scaled across multiple counties and integrated into the utility’s overall financial planning, it represents a significant cost.
CEO Joseph Siror warned, “If this cost is factored into the tariff, we are looking at an increase of over 30% in electricity prices. Consumers are already feeling the strain of high tariffs, and industries will face even greater challenges.”
He further explained that the additional financial burden would force Kenya Power to adjust its tariffs upward to cover the shortfall, potentially leading to higher manufacturing costs and a subsequent rise in the prices of consumer commodities.
Adding to the financial challenges is a growing customer debt that has seen a significant rise over the past year. As of March 2025, total customer arrears have reached Sh26.7 billion—a 32.94% increase from the previous year. The debt profile is notably varied:
Households: The arrears among household consumers have increased from Sh11.1 billion to Sh13.57 billion, marking a 22.22% rise.
County Governments: The debt owed by county governments has surged by an alarming 85% to Sh4.26 billion.
National Government Agencies and State Institutions: Their arrears have climbed by 48.06% to Sh3.32 billion.
Large Power Consumers and Industries: Debts from this segment have increased by 39.06% to Sh1.97 billion.
Small and Medium Enterprises (SMEs): The arrears in this group have grown by 18.57% to Sh3.58 billion.
A particularly troubling factor is the prolonged period of non-payment, especially among county governments.
Siror noted that the age of county debt has extended beyond 210 days—well over the typical 90-day debt cycle observed in other customer segments. This delay in payment exacerbates cash flow challenges and forces Kenya Power to reconsider its pricing strategies to safeguard its operational viability.
The current situation can be viewed in the broader context of Kenya’s ongoing efforts to reform its energy sector. Over the past decade, Kenya Power has undergone numerous tariff adjustments in response to fluctuating generation costs, fuel prices, and infrastructural investments.
Historically, tariff hikes have been met with mixed reactions. While they are sometimes necessary to fund critical investments, they also tend to spark public outcry—especially when consumers are already facing high living costs.
For instance, during previous tariff increases, there were significant protests and political debates over the affordability of electricity. These episodes underscored the delicate balance that regulators and policymakers must strike between ensuring the financial viability of utilities and protecting consumers from excessive price hikes.
The recent warning from Kenya Power on Tariffs Hikes, comes at a time when the utility’s financial health is precarious, and any further burden could jeopardize its ability to expand and modernise its network.
Policy lessons from past experiences suggest that transparent communication, phased implementation, and targeted subsidies for vulnerable consumers can help mitigate the negative impact of tariff increases.
In this context, Kenya Power and EPRA are under pressure to design a tariff adjustment mechanism that not only recovers the additional costs imposed by wayleave charges but also safeguards the interests of both consumers and industries.
Looking ahead, the energy sector in Kenya faces a crossroads. On one hand, the utility must secure additional revenues to cover rising operational costs and invest in critical infrastructure.
On the other hand, there is a pressing need to maintain affordability and ensure that electricity remains a competitive input for economic growth.
The outcome of the current tariff review could set a precedent for future pricing policies and shape the trajectory of Kenya’s industrial development.
Experts suggest that a multi-pronged strategy is essential to address these challenges. This includes improving billing efficiency, strengthening debt collection mechanisms, and exploring innovative financing options for network expansion.
