Kenya’s special economic zones get own power rateThursday March 30 2023
Investors domiciled in the 15 special economic zones will from this Saturday start paying a special tariff of Sh10 per kilowatt hour as the energy regulator moves to harmonise rates and entice more firms to set up in the tax-free regions.
These are part of the new electricity tariffs that the Energy and Petroleum Regulatory Authority (Epra) approved last week.
Epra says apart from investors at Naivasha’s Kedong SEZ, which are currently enjoying Sh5 per unit tariff, all the other special economic zones will now have a uniform tariff from this weekend.
Read: Electricity prices drop marginally in February
“We will have one uniform tariff of Sh10 across all SEZs except Kedong whose tariff remains unchanged,” said Epra director general Daniel Kiptoo.
The rate will remain constant until June 2026— the period within which the new electricity tariffs will remain in force.
Kenya has 15 gazetted SEZs, which form part of the ambitious plans to create thousands of jobs and boost exports to spur economic growth by 2030.
The tariff is the lowest rate per unit of power across all the consumption bands under the new regime, highlighting the State’s resolve to improve the investor climate in the face of increasing competition from countries that offer investors cheap electricity.
Kenya introduced a pilot tariff of Sh5 per kWh for the Olkaria-Kedong SEZ in Naivasha four years ago as it sought to determine how to price electricity in a bid to lure investors.
SEZs are designated areas aimed at promoting and facilitating export-oriented investments in a bid to boost inflows.
The zones are spread across Naivasha, Mombasa, Kisumu and Machakos and there are plans to provide more land for the facilities.
Besides the special electricity tariffs, SEZs enjoy special taxes and infrastructure that facilitate a wide range of activities such as storage, export and re-exports.
Read: Electricity prices increase marginally in January
SEZs offer industrial parks, free trade zones, as well as other auxiliary services such as tourism, meeting, conferencing and exhibitions.