Kenya’s payment to Uganda for electricity imports dropped by Sh550 million in the first three months of the year on increased local generation.
Kenya bought 48.69 million kilowatt hours (kWh) from Uganda in quarter one at Sh1.02 billion, down from 75. 09 million kWh worth Sh1.56 billion in a similar period a year earlier.
This eased the pain of a higher tariffs pact the two countries inked in 2014 that puts the cross-border purchase of electricity at Sh21 per kilowatt hour (kWh), up from between Sh8 and Sh10.
Kampala has emerged a key beneficiary of the new tariff as Kenya as remains a net importer of power in recent years as local generation lags consumption.
At Sh21, the Uganda power is seven times costlier than hydropower generated from local dams. The reduced demand for Uganda electricity comes in a period when local generators upped supply to the national grid.Kenya Electricity Generating Company and independent power producers injected 188 million kWh more electricity to the grid in quarter one than during a similar period a year earlier.
The additional power comes from geothermal and expensive thermal sources that compensated the reduced hydropower following poor weather, 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 grid. Kenya bought 930, 000 units of power from Ethiopia in the three months to March, up from 870,000 in a similar period last year.
Official data shows that Kenya’s electricity exports to Uganda increased 253 per cent 5.09 million units in the three months, earning Kenya Sh106.8 million—nearly a tenth of what we paid Uganda.
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 an 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.