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Three IPPs agree to lower electricity tariffs following govt negotiations
3 days ago
NAIROBI, Kenya August 6 — The Ministry of Energy has revealed that three Independent Power Producers (IPPs) in the variable renewable energy space have agreed to lower tariffs for Kenya power following the tariff negotiation between the government and the firms in March this year.

The Ministry had in March bargained with the power firms to reduce their tariffs but it turned out unsuccessful leading to delaying of power costs reductions as promised by President Uhuru Kenyatta.

According to the Energy Cabinet Secretary Monica Juma, engagement with the IPPs turned out positive as even larger IPPs expressed interest in the tariff reduction drive.

Juma expressed confidence that with the ongoing negotiations with other IPPS, optimal solutions will be achieved.

“So far, three IPPs operating in the variable renewable energy realm have signed up to lower tariffs that were in line with our expectations,” she said.

“Four of these larger IPPs that operate across various technologies have already proposed short- and medium-term tariff reduction solutions. Negotiations are underway on arriving at optimal solutions for Kenya,” she added.

Juma noted that the delay in renegotiation with the private power firms has resulted in a delay in the implementation of the plan to reduce power prices by 33 per cent before the end of March this year.

“The delay in putting IPPs to the negotiating table has, however, delayed the implementation of the second phase, forcing President Kenyatta to defer its implementation to the next administration. Polls will be conducted on Tuesday next week.

“We will expand negotiations to include all IPPs – small and large; old and new,” said CS Juma.

The Ministry also announced that the ongoing negotiations with IPPs are also expected to rope in KenGen which represents Kenya Power’s largest source of electricity.

“Kengen is the largest power generator in Kenya, accounting for over 70 per cent of all power purchased by Kenya Power, and is also a notable low-cost supplier. Notwithstanding this commendable contribution, Kengen have stepped up to the challenge of seeing whether they can bring even more efficiency into their operations, with resultant consumer tariff reductions,” the CS said.

Electricity prices in the country have held unchanged since January when the government affected the 15 per cent slash to consumer tariffs.