President Kenyatta has directed KPLC to renegotiate existing contracts with Independent Power Producers (IPPs) with a view to lowering the tariffs payable by KPLC to IPPs. This follows a raft of recommendations by a presidential taskforce established in March 2021 to review Power Purchase Agreements (PPAs). The Ministry of Energy has been directed to immediately commence the implementation of the taskforce report with a view to lowering the costs of electricity by 33% before the end of the year. Other key recommendations of the task force to be implemented are: Cancellation, with immediate effect, of all unconcluded negotiations of PPAs and to ensure that future PPAs are aligned to the Least Cost Power Development Plan (LCPDP); KPLC to adopt standard PPAs and a standard Government letter of support; KPLC to undertake a forensic audit on the procurement and system losses arising from the use of Heavy Fuel Oils (HFOs); and Disclosure of the beneficial owners of IPPs.
