Kenyan households and businesses are set to benefit from lower electricity connection costs following the signing of the Excise Duty (Amendment) Bill, 2025, into law by President William Ruto. The newly enacted legislation eliminates the 25% excise duty on imported transformers and their components a move aimed at enhancing affordability and accelerating national grid connectivity.
According to a statement from State House, the removal of the tax is expected to significantly reduce the cost of transformers, which are essential in every electricity connection. “This measure is expected to lower electricity connection costs for consumers by reducing the price of transformers, as every connection relies on transformer infrastructure,” the statement noted.
The Bill, passed by the National Assembly, reverses a tax imposed under the Tax Laws (Amendment) Act, 2024. The earlier policy was designed to promote local assembly and manufacturing of transformers. However, the high cost of imported parts due to the duty hampered the local sector’s growth and escalated overall costs.
The government now anticipates that the revised law will ease the financial burden on the Kenya Power and Lighting Company (KPLC), enabling it to procure more transformers within its existing budget. This move is set to bolster a consistent power supply, reduce service disruptions, and improve grid reliability across the country.
Additionally, lower transformer costs may also translate to reduced electricity tariffs over time, offering relief to millions of Kenyans.
The development aligns with Kenya’s broader strategy to expand electricity access, particularly through initiatives like the Last Mile Connectivity Project. The project aims to connect remote and rural households and businesses to the national grid by extending the low-voltage network to areas near transformers.
Between 2022 and 2024, the number of connected homes rose by over 774,000 from 8.9 million to 9.69 million while power generation capacity increased by 5.4%, from 3,076 megawatts to 3,243 megawatts.
With the removal of excise duty on transformers, the government hopes to support increased investment in power infrastructure and ensure reliable, affordable electricity reaches even the most underserved regions of the country.
