Kenyan electricity industry reforms : issues, impacts and approaches

Publication Type:
Thesis
Issue Date:
2007
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NO FULL TEXT AVAILABLE. Access is restricted indefinitely. ----- The Kenyan government, in recognition of the importance of electricity for economic development, has accorded a high priority to electricity development. For example, the government invested about US$ 212 million in the power sector over the period 1971-1988. Notwithstanding these investments, the Kenyan electricity supply industry has been known to perform poorly. For example, over the period 1983-1996, power shortages were widespread, totalling 33,000 per annum and returns on investment were very poor. There were delays in power project implementation, with subsequent unmet demand of over 200GW, which cost the country substantial loss of revenue, through the use of expensive alternative forms of energy. The transmission and distribution losses were high, averaging over 20% of net generation, and only about 40% of the population had access to electricity. Policy makers have traditionally attributed such poor performance to technical and administrative shortcomings in the industry. This research has however demonstrated that the causes of poor performance are to be found in the structural flaws of the electricity supply industry. These, in tum, are due to a set of several inter-related and mutually reinforcing influences arising from the country's colonial past and post-independence culture of over-reliance on foreign aid, and lack of coherent policy vision. Further, this research revealed that the contemporary electricity market reform was undertaken largely under pressures from multilateral financial institutions; it lacks the necessary political commitment from the Kenyan government. Hence it is incapable of meaningfully addressing the real causes of industry's poor performance. This research has proposed an alternative reform approach that is aligned with the socio-political environment in Kenya. It should therefore provide a satisfactory redress to some of the major causes of poor industry performance.
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