Power connection cost to double as subsidy withdrawn

Consumers will have to pay more to get connected to the national electricity grid following the Treasury’s decision to end a multi-billion-shilling subsidy that had kept charges at half the true cost of the service.

Treasury secretary Henry Rotich told the Business Daily that the government had withdrawn billions in support for the power distributor, signalling a possible doubling of the connection fees.

“We have not set aside any money for the Kenya Power subsidy in the 2014/15 financial year,” said Mr Rotich. “We were not going to finance this service on a sustainable basis.”

Electricity distributor Kenya Power had been bearing the additional cost of connections, but last year the company got a partial relief when the Treasury introduced a Sh2.7 billion subsidy to prevent a hike in the connection fee from Sh35,000 to at least Sh75,000.