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KAM Chair Mucai Kunyiha

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KAM lauds Kenyatta’s directive to review power deals at KPLC

NAIROBI, Kenya, October 1 -The Kenya Association of Manufacturers has described as ‘timely’ the directive issued by President Uhuru Kenyatta that power purchase agreements be reviewed and that a forensic audit on system losses from heavy fuel oils be undertaken at the Kenya Pipeline Company Limited.

In a statement, KAM chairman, Mucai Kunyiha noted the report is positive and encouraging for the market players coming at a time when there is increased public concerns on the high cost of electricity for both individual consumers and enterprises,

“It is a significant milestone in the long-standing efforts towards the reduction of power costs to boost local manufacturing and investment in the sector,” he said.

Kenyatta on Wednesday directed the Cabinet Secretary, Ministry of Energy to implement the recommendations of a Presidential Taskforce on Review of Power Purchase Agreements he set up in March to review power deals entered into by KPLC.

“The Taskforce recommendations include review and re-negotiations with IPPs to secure an immediate reduction in PPA tariffs within existing contractual arrangements and KPLC to take the lead in the formulation and related PPA procurement of the Least Cost Power Development Plan (LCPDP),” read the statement dispatched from State House, Nairobi.

The association noted that the recommendations provided will play a critical role in lowering the overall cost of electricity. Particularly, in reducing system losses and aligning Power Purchase Agreements to the Least Cost Power Development Plan

Additional recommendations issued by KAM include the need for reduced end-user tariff, stability, and reliability of the grid, planning with end-user tariff in focus, Kenya Power’s sustainability, net metering, and fast-tracking of infrastructure projects.

“It is imperative that there is now focus on reviewing the taxes, levies, and charges on power bills for manufacturers to reduce the overall cost of power. As a country, we need to get to US cts 9/kWh at least, in order to be competitive in the region and preserve our edge as an investor-attractive destination,” he added.

It blamed the high electricity tariffs for the increased cost of production and subsequently rendering the manufacturing sector uncompetitive.

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