Impact of Energy Sector Reforms on Electricity Penetration in Kenya Relative to Other Reforming Developing Countries

Abstract

Purpose: There are observable improvements in Kenya’s electricity sector since the mid-1990s. Among these are increase in electricity generated and an increase in number of households and institutions connected to the grid. These milestones have been achieved during the reform period. To find out whether these achievements are attributable to the reforms or not is the subject of this paper. This paper carries out an econometric evaluation of the impact of electricity sector reforms in Kenya relative to other four developing countries using panel data over the period 1993 to 2018. The paper assesses the impact of restructuring, unbundling, competition and private sector participation on electricity access. Methodology: In this study we carried out estimations of the outcome of reforms using panel data. The study period 1993 to 2018 was chosen based on data availability and also the consideration that power sector reforms in Kenya, Uganda, Tanzania and Senegal began after 1993. Findings: Using fixed effect method the study concludes that competition is key in enhancing access to electricity nationally and in both rural and urban areas. On the other hand, restructuring has a negative impact on both electrification in the four countries under study. Unique Contribution to Theory, Practice and Policy: Allowing more players and also in the buying of bulk energy for onward transmission and distribution with the aim of ultimately having a fully competitive marketing the sector would therefore improve the power industry outcomes.