NAIROBI, Kenya, Dec 12 – President Uhuru Kenyatta has announced that the cost of electricity will go down by 15 percent from this month.
Speaking during the Jamhuri Day Celebrations at Uhuru Gardens on Sunday, the Head of State said this will be the first tranche of the reduction of energy cost with the other 15 percent reduction to be implemented early next year in a move aimed at cushioning Kenyans and entrepreneurs from high energy costs.
“In honor of this pledge to the nation, and in response to the concerns over the high cost of electricity raised by both individual consumers and enterprises, I am pleased to announce to the nation that the reduction of the cost of electricity will be implemented in two tranches of 15% each,” The president said.
The President said that the Ministry of Energy has also initiated engagements with Independent Power Producers (IPP) aimed at renegotiation of power purchase agreements so as to give better value for money to consumers.
He said the first 15% will be achieved through initial actions focusing on system and commercial losses, to be reflected in the December bills, and a further 15% reduction, in the first quarter of 2022.
The implementation of the reduction of energy cost by 30pc comes after the president issued a directive in October to the Ministry of Energy to fast track the implementation of the recommendations of the Presidential Taskforce on Power Purchase Agreements.
“I urge the power producers to demonstrate goodwill as we seek to make our energy sector a greater catalyst of our national development,” he announced.
The government in October 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,” Energy Cabinet Secretary Monica Juma said during the Kenya Power stakeholders meeting.
