An analysis by Frost & Sullivan reveals that the genset market in East Africa is set to increase nearly 50 per cent by 2018.
According to the market researchers the current demand of electricity in Kenya, Uganda and Tanzania far outstrips supply, and with the continuing economic and population growth the demand will only increase.
In 2014 the genset markets earned revenue in Kenya, Uganda and Tanzania clocked in at $134.7 million, $44.5 million and $145.1 million. Frost & Sullivan estimates that by 2018 the numbers will have increased to $168.5 million, $65.4 million and $220.1 million.
Factors contributing to this are Tanzania’s new institutional reform in a bid to attract direct foreign investment, and severe drought in Kenya, which has forced the state-owned power utility company Kenya Power and Lighting Company (with a 97% share of the rental market) to rely on gensets rather than hydro-powered plants.
However, there is also a number of factors that could have a negative impact on the development; one is a preference of gas from the recently discovered gas fields in the region. Another is an increasing distribution of cheap low-quality gensets that has damaged the reputation of providers.