President Kenyatta orders review of IPP contracts

July 27, 2016
Shares
The President was speaking at the State House Energy Summit, which brought together energy stakeholders – heavy power consumers, small-scale consumers, and independent power producers – with senior Government officials, ordinary Kenyans and the media/PSCU
The President was speaking at the State House Energy Summit, which brought together energy stakeholders – heavy power consumers, small-scale consumers, and independent power producers – with senior Government officials, ordinary Kenyans and the media/PSCU

, NAIROBI, Kenya, Jul 27 – President Uhuru Kenyatta has ordered a review of all independent power producer (IPP) contracts as his administration moves to cut power costs, and widen coverage beyond the 56 per cent already achieved.

IPP contracts, President Kenyatta said, should be pegged on performance to ensure Kenyans have access to reliable power at affordable rates.

He made it clear that the private sector was a partner in widening access, but that costs would have to be checked: “As we go forward, yes, we want to encourage private sector participation in power generation but it must be done in a transparent manner to ensure Kenyans get maximum benefit.”

“Those arrangements that are not cost-effective to the Kenyan people must be terminated – in a legal way – in the shortest time possible.”

The President was speaking at the State House Energy Summit, which brought together energy stakeholders – heavy power consumers, small-scale consumers, and independent power producers – with senior Government officials, ordinary Kenyans and the media.

The televised Summit was organised by the President’s Communications Team, the Ministry of Energy and Petroleum and the Presidential Delivery Unit.

President Kenyatta challenged power producers and manufacturers not to transfer their inefficiencies to consumers, saying Kenyans had a right to benefit from the Government’s initiatives to reduced cost of power.

“Why should the prices of basic commodities continue to rise while the cost of power has significantly reduced,” President Kenyatta posed.

He expressed satisfaction at Kenya’s tremendous progress in increasing access to electricity in the last three years, in which time the access rate rose to 56 per cent from 27 per cent in 2013.

The President said his administration would meet the power needs of individual and industrial consumers at reliable and affordable rates.

“And our objective of increasing supply and reliability in order to give access to electricity to all Kenyans at an affordable rate is firmly on course. But more important, we want to ensure that our industries are also able to access power that can make us globally competitive,” President Kenyatta said.

President Kenyatta noted that the number of people connected to power has doubled over the last three years, while school connectivity stands at nearly 90 per cent.

He disclosed that the Government was working with the World Bank to expand off-grid power to ensure access in areas not served by the national grid.

“We are aggressively pushing this program because we want to ensure Kenyans – regardless of where they are – have access to power,” he said.

The President observed that increased access to power would stimulate commercial activity, boost economic growth and create jobs across the country.

Fielding questions during a panel discussion, Energy Cabinet Secretary Charles Keter said the country was moving away from thermal power production, and that this would make electricity even cheaper.

Kenya’s power generation, he said, had reached unprecedented levels with global experts saying that Kenya, as a developing country, now had a surplus of power. Nonetheless, the CS assured that the Government would raise its power production to make prices more competitive.

Keter said the Government had invested in the construction of more electricity substations and transmission lines to boost the availability of electricity. The Government has constructed and upgraded 81 power substations between 2013 and June 2016.

He said the increased generation and availability had enabled the Government to widen access to power, expanding the consumer base from 2.2 million households in March 2013, to 4.9 million households by June 2016.

The Energy Cabinet Secretary said 22,245 primary schools have been connected to power with 18,074 on grid while 4,171 on solar.

Keter exuded confidence that the country will achieve a 70 per cent access rate by June 2017 and universal access by 2020.

Kenya Power and Lighting Managing Director, Ben Chumo, stressed the Government’s continuing commitment to lowering the cost of power. He also disclosed that 35 towns and urban centres in 27 counties have been lit since 2013, under the street-lighting program. The program, funded by the national Government at a cost of Sh7.6 billion, will benefit 65 towns and urban centres across the country.

Other speakers included Energy Principal Secretary Joseph Njoroge and KETRACO Managing Director Fernandes Barasa.

Shares

Latest Articles

Stock Market

Most Viewed