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Implications of Cogeneration Policy on Performance of Sugar Manufacturing Firms

E. M. Siringi, Nelson Obange

Abstract


This study investigates implications of cogeneration policy on performance of Mumias Sugar Company in Kenya. The results of data analysis show the predictor variables portray no existence of problems of multicollinearity, heteroscedasticity and autocollinearity. Net policy effect analysis on revenues, costs and profit reveals transfer of benefits to the government utility (KPLC) instead of accruing net benefits to the Mumias sugar company. Profitability coefficient that is below one (0.617) implies that the policy is wanting and a disincentive to the sugar firms. We conclude that the tariff rate of 3.00 Ksh/ Kwh is unprofitable to the sugar-manufacturing firms. We recommend government of Kenya moot an articulate and realistic policy that can effectively foster investment in cogeneration.

Keywords


Cogeneration policy, Performance, Sugar-Manufacturing firms

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