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Kenya: How Kenya Power Threw Away Chance to Collect Sh200 Million a Month

Kenya: How Kenya Power Threw Away Chance to Collect Sh200 Million a Month

Steel billionaire Narendra Raval has revealed how Kenya Power gave him a Sh2.8 billion quote to connect electricity to one of his clinker factories in Emali.

At first the billionaire thought the utility company was joking. But when he realised that he would not get electricity without parting with the money, Mr Raval, says he sat down to do the math and it did not add up.

There was no value for money.

He says he realised it would cost him a fraction of the cost to build his own power plant in Emali, that besides reliability and independence, would also give him cheaper power at the end of the month compared to Kenya Power bills. He made up his mind to build his own power generating plant.

"I now produce 28 megawatts of power and I plan to generate my own power in all my other factories to ensure that we are self-reliant," Mr Raval, who is the chairman of Devki Group of Companies, said in an interview with the Nation.

He says Kenya Power lost a chance to supply him with electricity for the next six decades, the lifetime of the clinker mine.

"Kenya Power now loses revenues of about Sh200 million a month because of that decision," he says adding that the current high cost of buying power from the utility company makes locally produced goods uncompetitive in the global market.

Currently, Kenya Power charges businesses about Sh19 for every unit of electricity. This is three and a half times the actual price of generating power.

KenGen supplies power at Sh5.46 per kilowatt-hour. But Kenya Power has been known to buy more expensive power from independent power producers.

A secret Cabinet memo prepared by Treasury Secretary Ukur Yatani on the troubles at Kenya Power shows that the average cost of electricity, even after factoring in the prices of expensive diesel generators is Sh8.11 per unit.

But Kenya Power sells it at more than double this price to consumers, in a major rip off. Still, the company is sinking deeper into the red.The expensive power has seen major industries and companies in the agricultural and manufacturing sectors opt to generate their own power.The Devki Group is now one of the biggest cement and steel producers in East Africa, and the decision to start manufacturing power from waste and coal for its factories is set to deny Kenya Power billions of shillings in revenues.Mr Raval has so far […]

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