The government is seeking to reduce the import Value-Added Tax (VAT) on green energy equipment, such as solar panels and wind turbines, from 16% to 8%. The proposal is contained in Kenya’s Business Laws Amendment Bill 2026.
The bill, sponsored by the government, aims to reduce the challenge of businesses stuck at the VAT refund positions.
According to the Principal Secretary for Investment Promotion, Abu Bakr Hassan, the reforms aim to support businesses investing in renewable energy.
He acknowledged that businesses that invest in renewable energy face challenges that need to be resolved.
“We are planning a US$105 million expansion, so this is the first one that is still in the factory, the solar and the frozen processing line. And then we have another one at Kibwezi, where we’re going to build another US$50 million banana processing factory plantation in Tana River County,” Abu Bakr stated, speaking at NTV during an interview.
Companies that invest in renewable energy mostly face the challenge of VAT refunds on the equipment.
Speaking during the launch of Del Monte’s 800-kilowatt solar power plant and a state-of-the-art individually quick-frozen pineapple and mango processing line, Wayne Cook, the managing director at Del Monte Kenya Limited (DMKL), stated on the progress of renewable energy.
Despite the challenges in green energy, Wayne mentioned that the important thing is that the country is taking a step towards going green.
The use of less electricity and more natural energy is an indicator of working towards the goal of a country’s green energy, according to Wayne.
According to Wayne, using the Purchase agreement (PPA) helps save money, but not as much as the money that would be saved if the investment is made in the equipment.
“Going with a PPA or Power Purchase Agreement, we’re still saving money, but we’re not saving as much as if we had to invest in the equipment ourselves,” Wayne noted.
Kenya Business Law Amendment Bill 2026
The Kenya Business Laws Amendment Bill 2026 is a proposed legislative measure by the Kenyan government aimed at reforming and amending business-related issues.
The amendment to the bill aims to stimulate the growth of the renewable energy business by providing favorable terms for the importation of equipment.
It will ensure that the business landscape is enhanced to impact the economy and the industries.
Also Read: Blow to MPs, Senators as Court Rules on Constitution Amendment Bill 2025
Key proposals on Renewable Energy
Reduction in Import VAT on Selected Equipment from 16% to 8% on specific categories of equipment and machinery to lower the cost of importing capital goods.
Support for Green Energy and Sustainable Sectors through reducing VAT on equipment related to renewable energy to attract investment in clean energy under the Bottom-Up Economic Transformation Agenda (BETA).
Addressing VAT Refund Delays and Business Capital Tie-Ups through the provision of upfront relief on imports rather than waiting for refunds.
Also Read: KRA’s VAT Special Table to Track Small Non-Compliant Traders; What it means
Del Monte Kenya Limited
DMKL commissioned an 800-kilowatt solar power plant and a state-of-the-art individually quick-frozen pineapple and mango processing line at its Thika farm.
In partnership with Berkeley Energy Corporate Solutions (BECS), the company developed solar panels to reduce the company’s dependence on the national grid.
The Individually Quick Frozen (IQF) processing line sits on their existing canning infrastructure and can process 3.6 tonnes of pineapple per hour, increasing productivity.
“These facilities signal our future as a catalyst for industrial growth, job creation, and rural economic empowerment. Our investment will strengthen Kenya’s agricultural value chain and boost export competitiveness, creating meaningful economic opportunities for local communities,” said Wayne.
Value addition initiatives like the solar plants and frozen food initiatives are initiatives that will reduce reliance on raw exports and position local industries to succeed in global markets, according to Nicholas Tatrallyay, Managing Director, BECS.
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