Economy
Uhuru Orders Review Of Power Purchase Deal

(Reuters) – Kenya’s President Uhuru Kenyatta has set up a team to review power purchase agreements signed over the years by the state power distributor, which has been making losses in the recent past.
Energy consumers in the East African nation often complain of high electricity charges, with some of the costs being attributed to idle capacity charges to compensate power generators for electricity generated but ultimately not used.
The review team will carry out its work over six months, the president said in a legal notice seen by Reuters on Wednesday, and no new contracts will be entered into during that period.
ADVERTISEMENT
Kenya Power, the distributor, swung into a pretax loss of 7.04 billion shillings ($64.44 million) for its financial year to the end of last June.
Out of the 87.5 billion shillings cost of sales incurred during the period, 47.5 billion shillings, or 54%, was capacity charges paid to power producers, officials said.
Under the typical power purchase agreement, a power producer gets paid for any electricity produced, even if it is impossible for Kenya Power to sell it to consumers due to excess capacity and other reasons.
Kenya Power buys most of its electricity from state-controlled Kenya Electricity Generating Company.
It has also contracted numerous independent power producers, which normally require power purchase agreements before securing financing to set up generation plants.
($1 = 109.2500 Kenyan shillings)
Kenya Insights allows guest blogging, if you want to be published on Kenya’s most authoritative and accurate blog, have an expose, news TIPS, story angles, human interest stories, drop us an email on [email protected] or via Telegram
-
Investigations1 week ago
Kenya’s Court Of Appeal President Ouko’s Daughter Involvement In Money Laundering With DTB Bank.
-
Investigations2 days ago
Owner of Windsor Motors abducted by Ethiopian tycoon
-
Business2 days ago
Airtel Owner Is Considering Exiting Kenyan Market
-
Investigations5 days ago
The Corrupt Faces At Capital Markets Authority (CMA) Office And How Chris Diaz’s Freedom Was Engineered Through Backdoor.
-
Politics2 weeks ago
Senator Mutula Junior staring at bleak future in Wiper
-
Investigations6 days ago
Meet the Junior secretary grabbing CS Macharia by his ankles
-
Investigations1 week ago
Unholy Relationship: Despite Sh2.5B Corruption Scandal, Kebs Stick To Blacklisted Imported Cars Clearance Firm.
-
Investigations2 days ago
As Chase Bank Goes On Liquidation, Its Risk Manager Evaded Arrest And Fled To Qatar National Bank