Why senators want power purchase agreements revoked

Tuesday, March 14th, 2023 06:00 | By
Why senators want power purchase agreements revoked
Energy Committee chairman Senator Wamatinga Wahome.

INQUIRY:  The Senate’s Energy Committee has called for an inquiry into all Independent Power Purchase Agreements (IPPAs) entered into by Kenya Power, the country’s national electricity distributor.

Energy Committee chairman Senator Wamatinga Wahome said there is no explanation why KenGen, which produces 60 per cent of the energy ends up getting only 40 per cent of the proceeds while the Independent Power Producers (IPPs) get the rest, adding that some IPP agreements are signed in less than six days.

“We have resolved as a committee to constitute an inquiry to find out just how we got there,” he said. The move comes despite similar efforts by the Presidential Taskforce on power sector reforms, which was established in 2021 to address long-standing issues in Kenya’s electricity sector.

The Energy Committee’s decision to launch an investigation into IPPAs follows a series of reports that have raised concerns about the transparency and fairness of these agreements. “As a committee, we have resolved that any PPA that was signed without the good interest of Kenyans should be revoked or renegotiated,” said Wahome.

National grid

IPPAs are contracts between private power producers and Kenya Power that allow the former to sell electricity directly to the national grid. Critics argue that many IPPAs have been negotiated in opaque circumstances, with little input from local communities or other stakeholders.

In addition, some have accused Kenya Power of paying excessive prices for electricity generated by these private producers, resulting in higher electricity bills for consumers. This also comes at time when Kenya Power has applied for an upward tariff review and news of posting a loss in the last financial year.


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