Govt strikes deal with IPPs for cheap, reliable power

Govt strikes deal with IPPs for cheap, reliable power

The Kenyan Government has entered into a formal engagement with Independent Power Producers (IPP) as reforms continue in the energy sector.

The partnership will contribute to the delivery of the constitutional mandate of the Ministry of energy by providing clean, reliable, sustainable low-cost power.

This has been made possible not only through extensive research being done by the government but also as the Ministry of Energy engaging 77 IPPs in listening sessions which have defined the issues that are prevalent on both sides.

Consultations with Energy sector experts, regulators, legal and financial advisors have also taken place.

“We are persuaded, more than ever, that reform in the energy sector is imperative and urgent. More importantly, it has begun to deliver concrete results. Among them, a 15 percent (first tranche) reduction in power tariffs, effected in January 2022. This step has had a significant impact. While all tariff categories benefited from the reduced tariff, low-tier customers had decreases in power costs of up to 23 percent,” said the report.

The ministry has witnessed an improvement in performance across the sector, after power distributor, Kenya Power and Lighting Company (KPLC) posted Ksh.3.82 billion net profit for the half-year ended December 31, 2021.

Other companies that have recorded a net profit include KenGen with a growth rate of 7 percent.

A report by Energy and Petroleum Regulatory Authority (EPRA) shows that the country still continues to lead in electricity connections across Eastern Africa, with over 92 percent of electricity generated from renewable sources.

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