Cheaper electricity on the way as State cuts thermal deals

Reclaim share

In mid August, KenGen, on behalf of the Government, contracted Aggreko to provide an additional 140 megawatts of emergency power to cushion the country against the effects of the power shortfall — that had forced a rollout of a two-month power rationing in August.

It was a one year agreement but had an exit clause in anticipation of hydro power dams filling to capacity.

The plans to cut back on thermal power is set to upset private power producers who have steeped up their activity in the local supply market in recent months as Kenya emerged as fertile business opportunity.

The private operators led by British firm Aggreko, Iberafrica and OrPower 4 have raced to fill the power generation gap left by KenGen, whose market share has been whittled by 21 per cent as the State-owned firm is heavy on hydro power.

The independent power producers saw their revenues increase 84 per cent in the six months to December to Sh6.2 billion.

But with the expectation of increased rainfall it’s expected that KenGen will reclaim its share of the generation market.