How New Law Signed By Ruto Will Reduce Electricity Prices
The Bill amends the Excise Duty Act, CAP 472, to remove the 25 percent duty on imported fully assembled electric transformers and their parts.
Marvin Chege 
President William Ruto assented to the Excise Duty (Amendment) Bill, 2025 on Thursday, April 17, which sets the stage for the reduction in terms of the cost of electricity.
This was announced by State House spokesperson, Hussein Mohamed, who revealed that the Bill amends the Excise Duty Act, CAP 472, to remove the 25 percent duty on imported fully assembled electric transformers and their parts.
"This measure is expected to lower electricity connection costs for consumers by reducing the price of transformers, as every connection relies on transformer infrastructure. It will also help bring down electricity tariffs by cutting transformer replacement costs," he stated in part.
Kenya Power technicians at work. /KENYAN WALLSTREET
Further, with the reduced cost of transformers, more units are expected to be imported, allowing even more Kenyans to gain access to the power grid.
"Additionally, it will enable the Kenya Power and Lighting Company to procure adequate transformers within its current budget, supporting a consistent power supply and minimising disruptions," he added.
The National Assembly has approved the Excise Duty (Amendment) Bill, 2025, which eliminates excise duty on certain imported goods.
Previously, a 25 percent excise tax was imposed on imported transformers through the Tax Laws (Amendment) Act, 2024, as part of an effort to encourage local assembly of this vital power distribution equipment. However, the policy backfired, driving up import costs for essential components and hindering local transformer production.
The newly passed law aims to reverse that impact, making it more affordable for companies in the electricity sector to bring in key equipment like transformers.
The removal of the tax is expected to reduce operating costs for sector players and increase the manufacturing and supply of transformers.
This move supports ongoing efforts like the Last Mile Connectivity Project, which focuses on expanding the national grid to reach rural and underserved areas by extending low-voltage lines from existing transformers.
Between 2022 and 2024, Kenya increased household power connections by over 774,000, rising from 8.9 million to nearly 9.7 million homes.
In the same period, power generation grew by 240 megawatts, from 3,076 MW in 2022 to 3,243 MW in 2024, marking a 5.4 percent increase.
