Page 12 - AfrElec Week 46 2021

AfrElec POLICY AfrElec

Kenya to engage IPPs

on energy costs

KENYA PRIVATE firms generating electricity for sale in this task may seem daunting but our teams
to Kenya’s national grid are required to submit have taken time to elaborate the execution path.
a formal expression of interest in negotiating Reforms will be instituted within a specific plan
sustainable energy innovations to the Ministry and timelines to change the energy sector,” she
of Energy. said.
The Energy Ministry, during a Kenya Power Recently a task force urged the need to
stakeholders meeting on November 16, invited improve the efficiency and effectiveness of play-
independent power producers (IPPs) to write ers in the electricity sector to reduce the cost of
formally expressing interest in such negotiations power, which is too high for productivity to be
by November 19. sustained. The government’s aim is to reduce
“I would like to formally invite all IPPs to electricity costs in the East African country by
come forward to the negotiating table so that December 25, 2021.
we can engage towards a win-win solution that In October, the government suspended
secures a sustainable energy sector,” said Energy negotiations of all pending and new contracts
Cabinet Secretary Monica Juma, during the with IPPs, as Kenya Power reviews existing
meeting in Kenyan capital Nairobi. agreements to lower the cost of electricity in the
IPPs must write to the Energy Principal country.
Secretary and notification of scheduled meet- This followed information that IPPs
ings will be issued for initial engagement with a accounted for 47% of Kenya Power’s electricity
selected energy sector team led by Energy Chief procurement costs in the financial year 2020,
Administrative Secretary Zachariah Ayeko. but for only 25% of its power volumes. KenGen,
The government is under pressure to reduce by contrast, for 48% and 72% of the respective
the cost of the power that state-owned Kenya figures.
Power sells to consumers after buying electricity This raised questions on the tariffs the state
from IPPs. Kenya Power, the national electricity utility paid to IPPs in relation to capacity pro-
distribution firm – or “Kenya Power and Light- cured and on the nature of contractual terms.
ing Company”, to give the utility its fully name – “Whereas the Government of Kenya appre-
also buys power from government-owned Kenya ciates the emergence of IPPs as key elements in
Electricity Generating Company Plc (KenGen). the power sector value chain we cannot ignore
Juma said the negotiation process will be the reality of the serious challenges that abound
driven without intermediaries to avoid confu- in the power sector,” Juma said on November 16.
sion, in the interests of transparency, and that She said reforms need to be undertaken
the selected team will offer guidance on the way urgently if Kenya Power was to reclaim its posi-
forward after the engagement. tion in the economy, remain profitable and be a
“I am alive to the fact that our undertaking sustainable company.™

P12 www. NEWSBASE .com Week 46 18•November•2021