Goal of 100 Percent Connectivity by 2030 Propels Kenyan Electricity Industry, Notes Frost & Sullivan

CAPE TOWN, South Africa, Sept. 8 /PRNewswire/ --The Kenyan electricity industry has entered a phase of rapid expansion. Massive infrastructure development is being conducted in the power generation, transmission and distribution sectors. Strong economic growth, coupled with government-backed plans to achieve 100 percent electricity connectivity by 2030, is underpinning exciting times for the industry.

(Logo: http://photos.prnewswire.com/prnh/20081117/FSLOGO)

(Logo: http://www.newscom.com/cgi-bin/prnh/20081117/FSLOGO)

New analysis from Frost & Sullivan (http://www.energy.frost.com ), 2010 Updated Overview of the Kenyan Electricity Industry, finds that the total generation capacity of Kenya stood at approximately 1,724MW by the end of 2009. Hydroelectric power accounted for approximately 44 percent of the country's total installed capacity in 2009, with thermal and geothermal power accounting for 41 and 9 percent, respectively. In this research, Frost & Sullivan's expert analysts thoroughly examine the following sectors: power generation, power transmission and power distribution.

If you are interested in more information on this study, please send an e-mail to Patrick Cairns, Corporate Communications, at [email protected], with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.

"There are two important growth drivers in the Kenyan electricity industry," notes Frost & Sullivan Research Analyst Salima Zyambo. "The first is the high economic growth underway in Kenya and second, the Government's goal of achieving 100% electricity connectivity in the country by 2030."

The Government of Kenya is focusing on harnessing the country's geothermal and wind electric energy potential estimated to be 7,000MW and 4,400MW, respectively. Geothermal energy is expected to replace hydro energy as the major source of electricity.

Since the inception of Vision 2030 in 2008 (Kenya's economic development strategy for achieving and maintaining an economic growth rate of 10 percent per annum until 2030), the Government has introduced several reforms to revive the country's key industries like telecommunications, tourism and agriculture. This, in turn, has led to the growth of these industries.

"It is imperative that key economic sectors such as these receive FDI in order to experience continued growth," advises Zyambo. "Furthermore, the Kenyan Government realises that one of the key success factors to achieving this objective is a constant and reliable electricity supply."

However, high electricity tariffs are emerging as a major challenge for the industry. Although Kenya remains the economic hub of East Africa and is experiencing rapid economic growth, many multinational companies in the manufacturing sector have closed down their operations in the country. They have cited surging production costs as the main reason, with high electricity tariffs being a major contributor to these costs.

"Tariffs are an important source of funds for ongoing Government projects," remarks Zyambo. "But with companies from one of the industry's major end user sectors exiting the country, this is proving to be a key challenge in the industry."

Government-supported incentives to companies that generate their own power and/or implement energy-saving measures in their daily operations could go a long way towards reducing the energy costs incurred by companies.

"The Kenyan government needs to proactively encourage companies to implement energy saving measures in their daily operations," concludes Zyambo. "Moreover, it needs to encourage companies that have the resources to generate their own electricity."

2010 Updated Overview of the Kenyan Electricity Industry is part of the Energy & Power Growth Partnership Services programme, which also includes research in the following markets: Strategic Analysis of the Kenyan Electricity Industry and Strategic Analysis of the Ugandan Electricity Industry.  All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

2010 Updated Overview of the Kenyan Electricity Industry

M5C8

SOURCE Frost & Sullivan