Kenya’s Ministry of Energy and Petroleum proposed new tax exemptions aimed at keeping geothermal electricity tariffs below Ksh 9 per kilowatt-hour to help the country manage rising power generation costs while expanding capacity.
According to Business Daily Africa, the Kenyan government intends to help people out with their electricity bills. It’s all part of a bigger plan to keep folks from paying more for power, while also making sure investors still want to put money into geothermal energy, which is a super important part of how Kenya gets its electricity.
The ministry says that getting geothermal projects going is getting more expensive. Things like the risks involved in drilling, the cost of bringing in equipment from other countries, and just general financing costs are all adding up. Those in charge figure that if they can cut down on taxes for the important stuff needed for these projects, It will lower the upfront costs and stop electricity prices from going up more than they’re aiming for.
The ministry is asking to be let off the hook for certain taxes and fees that come up when they’re developing geothermal resources and making electricity. These breaks would mainly be for brand new projects that are still being worked on.
Kenya is actually a big deal in Africa when it comes to geothermal energy, with it making up about a third of the power they can generate. This kind of energy is super important for keeping the country’s power supply steady and cutting down on how much they need hydropower and fuels.
The government is saying these new tax ideas are needed to make sure things are affordable for people while also getting private companies to invest in geothermal projects for the long run. These projects usually cost a lot to start and take a long time to get going.
Companies like KenGen and other private power producers are still building up their geothermal power generation, especially in the Olkaria area, and they are looking at other places in Kenya too.
These tax breaks haven’t been finalized yet and need to go through the proper financial and legal steps before they can be put into action.