An enhanced cross-border pact and drought force country to pay steeply for power
Kenya’s payment to Uganda for electricity imports more than tripled to Ksh3.5 billion ($33.7 million) in the first eight months of the year, driven by a higher tariff and increased purchases from Kampala.
Nairobi is now feeling the pain of a higher tariffs pact the two countries inked in 2014 that puts cross border purchase of electricity at Ksh21 ($0.20) per kilowatt hour (kWh), up from between Ksh8 ($0.08) and Ksh10 ($0.10).
Uganda is gaining from the increased sale to Kenya, which imported 168 million kilowatt hours (kWh) in the period compared to 47.7 million units in the same eight-month window last year, marking a 252 per cent growth, according to official data.
Kenya paid Uganda about Ksh1 billion ($9,638,560) 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,” said the Energy Regulatory Commission.
At Ksh21 ($0.20), 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, which drove down water levels in dams and ultimately cut hydro power.
The hydro electricity supply shortfall was plugged by increased 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, which is not linked to the national electricity grid.
Kenya bought 2.4 million units of power from Ethiopia in the year to August, up from 1.9 million units in a similar period last year.
Official data shows that Kenya’s electricity exports to Uganda fell 83 per cent 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 Sh21 per unit.
Uganda is the largest market for Kenyan goods and has recently 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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