The Ministry of Energy has stepped up its lobbying MPs to lift a ban on signing of power purchase agreements (PPAs) by Kenya Power, in a new push aimed at boosting electricity generation to meet growing demand.
Energy and Petroleum Regulatory Authority (Epra) said the moratorium on signing of PPAs, which has been in place since 2018, has left Kenya’s electricity demand growing faster than generation.
Kenya Power has not signed any PPA since 2018 after the government started a crackdown to establish how the utility firm was entering into contracts with independent power producers (IPPs), ending up with expensive power for Kenyans.
Former President Uhuru Kenyatta formed a task force to investigate the process of entering into the PPAs and a moratorium was placed until last year when it was lifted through a cabinet decision.
While the moratorium by the executive was lifted, Kenya Power still cannot sign any new PPA since the National Assembly also placed its moratorium as it investigated the cases of expensive power in the country, which has not been lifted.
“From 2018 there haven’t been generation projects (PPAs) that have been signed and none have gone into execution phase,” said Epra director-general Daniel Kiptoo.
Mr Kiptoo said that under the leadership of Energy Cabinet secretary Opiyo Wandayi, Epra this week met the National Assembly’s Energy Committee, in a new push to convince MPs to lift the moratorium.
The regulator said the pause in signing of PPAs meant that plants that would have been constructed over the past seven years have not started, even as consumption of power in the country grows.
The authority says the lag in power generation has made Kenya a net electricity importer from Ethiopia, Tanzania and Uganda.
Between July and December 2024, Kenya imported 751.95GWh of electricity (10.41 percent of the country’s energy mix) from the three neighbors. The imports grew by 79.41 percent from importation of 419.13GWh during a similar period in 2023.
“We did yesterday, under the leadership of the CS, engage with the Energy committee with a view to getting parliament to lift this moratorium because the Executive has done its bit. We are engaging parliament to take the same step to ensure the security of supply for the country,” Mr Kiptoo said.
He said that while Kenya’s electricity demand has grown organically as the economy grows in the past seven years, the country has not matched with power generation capacity due to the moratorium.
Epra and the Ministry are now engaged in a campaign to convince MPs to lift the moratorium in order to prevent the country from sliding into a deeper electricity crisis.
The National Assembly’s moratorium came from Laikipia County woman representative Jane Kagiri’s motion seeking the reduction of cost of electricity in the country, by investigating agreements between Kenya Power and independent power producers (IPPs) and establishing the nexus between costly power and overreliance on IPPs.
Ms Kagiri also asked that Kenya Power and the Ministry of Energy be stopped from entering new contracts with any IPPs until the National Assembly resolved the issue.
In November last year, the Energy committee published its report on the subject, recommending the lifting of the moratorium upon adoption of the report by the National Assembly, though MPs are yet to adopt it.
“Within six months upon adoption of this report, the BRS submits to the National Assembly a report containing a list of owners, beneficial owners, shareholders and directors of each entity operating as an IPP in Kenya,” the energy committee also resolved in the report.
The committee also recommended that going forward, the Ministry of Energy stops PPA amendments that occur midway through the lifecycle of IPPs and that all subsequent PPA amendments/variations to be subjected to the National Assembly for approval.
Epra now says that as a result of limited power generation when the moratorium has existed, the country has been exposed to risks of power outages especially when power plants break down during unplanned maintenance periods.
The regulator says that electricity demand in the country has hit peaks of 2,316MW when the capacity is 2,320, terming a 4MW reserve margin during such times a high risk.
“There has been a conversation around that in terms of getting the representatives of the people (MPs) to understand the challenge that the country is facing, and this is our role as the regulator to ensure that we advise the policy makers on matters of security of supply,” Mr Kiptoo said.
"When we have 2,316MW of peak demand in the evening and yet sometimes you have 2,320MW, leaving you with only a 4MW reserve margin, it tells you that we are doing very badly as a country. The rule of thumb is that we need to be at least 10 percent above our peak demand to have that buffer. Today, we don't have that buffer and that's as a result of what we've seen from 2018 to 2025," he added.
