Lawmakers have voted to remove excise duty on imported transformers and parts, setting the stage for a reduction in connection charges for homes and businesses.
The National Assembly this week passed the Excise Duty (Amendment) Bill, 2025, which has dropped the 25 percent duty on imported fully assembled electric transformers and parts.
“The removal of excise duty will reduce electricity connection costs for customers. Since every customer is connected to a grid linked to a transformer, reduction in the costs of transformers will have the positive effect of reduction of connection fees,” reads the Bill which now awaits President William Ruto’s assent to become law.
The deterrent cost of transformers has been a major driver of elevated cost of connection for homes and businesses, slowing down Kenya’s march towards universal access to electricity by 2027.
Kenya Power on average charges between Sh35,000 and Sh40,000 to connect homes and small businesses to single-phase power, and up to Sh75,000 for three-phase connections for customers who use high-power appliances and machinery, including large businesses and factories.
Connection charges for homes and businesses in rural areas that have no transformers, however, climb to more than Sh100,000.
A transformer costs about Sh900,000, but this varies depending on the capacity.
Kenya Power, for example, disclosed that it lost 365 transformers valued at Sh328 million to vandalism in 2023, putting their average cost per unit at Sh898,630.
The near-monopoly electricity distributor also revealed previously it lost 78 transformers valued at Sh78 million in the early months of 2024, highlighting the cost of the devices.
Loss of transformers usually results in affected areas staying in darkness for days and sometimes weeks, with Kenya Power linking the delays in reconnecting customers to the process and cost of procuring the electrical devices.
“The removal of excise duty will reduce the replacement cost of transformers and by extension reduction of the electricity tariff,” the Bill states. “[It]… will enable the Kenya Power and Lighting Company to procure adequate transformers within its current budget and prevent or reduce power blackouts due to insufficient stocks of transformers.”
Kenya Power earlier this month floated a tender for 3,319 distribution transformers from local manufacturers.
The State-owned utility said it was grappling with a shortage largely occasioned by budget cuts.
"Kenya Power had budget challenges when the National Treasury slashed budgets for ministries and parastatals. As a result, Kenya Power did an initial tender in October 2024 for transformers that were out of stock and could be accommodated in the reduced budget," John Ngeno, the general manager for supply chain and logistics at Kenya Power, said.
"Kenya Power intends to procure any ready stocks from local manufacturers, whose supply is not limited to KPC, but also Rural Electrification and Renewable Energy Corporation and other private firms."
