Page 7 - AfrElec Week 10 2023

AfrElec POLICY AfrElec

Kenya lifts ban on new PPAs

KENYA KENYA’S Cabinet has lifted an earlier ban on nation’s energy security through opening up the
new power purchase agreements (PPAs) with energy sector for continued investments,” it said
independent power producers (IPPs) as it seeks in a statement.
to boost output as droughts are becoming more Kenya Power says the East African country’s
extreme, reducing hydropower generation, reserve margin – the amount of unused available
which now contributes 29.3% to the energy mix, power generation capability – is at just 4% and
the Daily Nation reports. therefore onboarding new power generators
Former President Uhuru Kenyatta had imple- to the grid is necessary, according to the Daily
mented the ban following a probe that revealed Nation.
flaws in the licensing of existing PPAs, some of The Cabinet has also approved a framework
which sell power at 10 times the cost than the for the engagement of these independent power
majority state-owned Kenya Electricity Gener- producers, opting for energy auctions rather
ating Company (KenGen) does. than the current fixed feed-in tariffs regime.™
Now, President William Ruto’s administra-
tion has lifted this moratorium, which allows Lake Turkana
energy investors to sign contracts with Kenya Wind Power,
Power (KPLC) for the supply of electricity. His Kenya
government will also seek bids from companies
to build power plants using green energy.
New power suppliers will now get a chance
to join major producers such as Lake Turkana
Wind Power, Kipeto Energy Plc, and Rabai
Power Ltd, which currently have active PPAs
with KPLC.
A Cabinet brief noted that the move has
been necessitated by the biting drought that
has reduced the amount of power generated by
hydropower dams. Kenya is facing its fifth con-
secutive failed rainy season.
“Cabinet approved the lifting of the mor-
atorium on [PPAs] as a way of enhancing our

INVESTMENT

EIB supports Kenya’s clean energy quest

KENYA KENYA’S efforts to invest in renewable energy National Treasury and Economic Planning
have received a major boost from the Euro- Cabinet Secretary. “The route to storage has the
pean Investment Bank (EIB), which intends to potential to develop green hydrogen to deliver
strengthen support for green hydrogen invest- sustainable, green and inclusive growth.”
ment in the country. He added that with the aid of the EIB, Kenya
EIB, which is the world’s largest multilateral intends to invest in projects that will develop
bank and leading global financier of renewable green hydrogen as part of the Kenya Energy
energy, signed a joint declaration on renewable Roadmap 2040.
clean hydrogen with the East African nation Through the roadmap, Kenya plans to accel-
that will see the lender extend $1.8mn to the erate low-carbon transition while ensuring the
country for onward lending to green hydrogen delivery of power that is reliable and affordable.
investors. Specifically, the country intends to increase
The funding will help accelerate Kenya’s installed capacity to 100 GW by 2040, which
green hydrogen ambitions as the country seek entails attracting more than $300bn worth of
to transition to renewable energy. Currently, the energy investments.
country produces more than 90% of its electric- Kenya reckons that the development of green
ity from hydropower, geothermal energy, solar hydrogen has the potential to enable 100% of the
and wind energy as well as biomass. country’s energy needs to be supplied by clean
“Kenya has some of the best renewable energy power, which is critical in providing affordable
sources in the world if the storage components power for economic development and industrial
were equally developed,” said Njuguna Ndung’u, growth.™

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