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Kenya: Energy CS Juma Kicks Off Engagement With Independent Power Producers

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Nairobi — Energy Cabinet Secretary Monica Juma has invited Independent Power Producers (IPPs) to negotiate on sustainable energy innovations and urged them to formally express their interest by Friday.

Speaking during the Kenya Power stakeholders meeting on Tuesday, the CS stated that the IPPs need to formally write to the energy ministry expressing their interest through the Principal Secretary.

This will be followed by a notification of scheduled sessions during which there will be an initial engagement with a select team in the energy sector led by Chief Administrative Secretary Zachariah Ayeko.

“I would like to formally invite all IPPs to come forward to the negotiating table so that we can engage towards a win-win solution that secures a sustainable energy sector in the Republic of Kenya,” she said.

Juma added that after the engagement, the team will offer guidance on the way forward.

In the interest of transparency, she emphasized that the process will be driven formally without intermediaries to avoid confusion.

“I am alive to the fact that our undertaking in this task may seem daunting but our teams have taken time to elaborate the execution path,” she explained.

The reforms, she said, will be instituted within a specific plan and timelines due to the mounting pressure to put in place changes in the Energy sector.

The rationale driving the recommendations of the task force in this regard is to improve the efficiency and effectiveness of each of the sector players with the objective of lowering the cost of energy which is far too high for any productivity to be sustained.

The government aims to reduce power costs in the country by December 25th.

The government last month froze all pending and ongoing contracts with independent power producers as the utility firm reviews the existing agreements to lower the cost of electricity in the country.

This is after it emerged that that IPPs accounted for 47% of power procurement costs in FY2020, but only 25% of power volumes, while KenGen accounted for 48% of costs and 72% of volumes.

This raised questions on the amount of tariffs paid to IPPs in consideration to the capacity that was procured and the nature of the contractual terms.

“Whereas the Government of Kenya appreciates the emergence of IPPs as key elements in the power sector value chain we cannot ignore the reality of the serious challenges that abound in the power sector,” she said.