Kenya to review tariffs for power investors

Kenya is reviewing tariffs for power purchase from Independent Power Producers (IPP) in order to lower the cost of electricity for consumers, a senior official said Tuesday.

Cabinet Secretary of Energy and Petroleum, Charles Keter, told a media briefing in Nairobi that a multi-sectoral task force had been formed to undertake the study which is expected be completed by the end of the year.

"The task force will work with investors to review the tariffs on the basis of macro-economic changes which have taken place," Keter said during the launch of the IPP Power Purchasing Agreements (PPAs) Review Task Force.

"The aim is to ensure that the cost of electricity in Kenya is competitive so as to attract industries into the country," he said.

"In the meantime, until we have completed the review, we have suspended further processing of new PPAs under the feed-in tariff," he added.

The study will target both existing PPAs as well as ongoing negotiations between the national power distributor, the Kenya Power Lightning Company, and IPPs. The study will review all power purchase agreements that Kenya has entered into since 1996.

Keter said that technological advances in the past two decades had led to a drastic reduction in the cost of equipment for power generation.

"We want to leverage on this positive change so that we give Kenyan consumers the cheapest possible power tariffs," he said.

The task force will also review all laws relating to PPAs including the Energy Act 2006. Endit