Kenyan Members of Parliament (MPs) have rejected a proposal by the Ministry of Energy and Petroleum to lift a moratorium on Power Purchase Agreements (PPAs), citing a lack of adequate protections for taxpayers. The Ministry sought permission to lift the ban specifically on coal-fired power plants, highlighting an urgent need to diversify and expand power sources to meet the country’s growing energy demand. They argued that coal power could offer a stable, cost-effective addition to Kenya's energy mix.
However, MPs, particularly those leading key committees, expressed strong reservations about lifting the moratorium without safeguards to prevent potential exploitation by private investors. The legislators stressed that new PPAs should prioritize public interest over investor profit and insisted on involving Parliament in decisions related to energy agreements.
This discussion took place during a National Assembly leadership retreat with key officials, including Energy and Petroleum Cabinet Secretary Opiyo Wandayi, Principal Secretary for Energy, and Kenya Power's Managing Director and CEO, Dr. Joseph Siror. Mwala MP Eng. Vincent Musyoka, chair of the National Assembly’s Energy Committee, voiced concerns about the lack of substantial protections in the Ministry’s proposal. He referenced previous issues with contracts, such as those with the Lake Turkana Wind Power project, which saw higher-than-expected costs due to agreements that were not aligned with forecasted savings.
Other MPs emphasized that before lifting the moratorium, Kenya Power should disclose the costs involved in existing power agreements to ensure transparency. Emuhaya MP Omboko Milemba added that the moratorium initially aimed to address excessive costs to Kenyan consumers. He called for clarity from the Ministry on measures to prevent a repeat of past issues, where some agreements led to hidden and inflated expenses.
Kenya Power CEO Dr. Siror clarified that high energy costs stem from varying technology costs, with thermal power being the most expensive. He explained that geothermal energy, such as from Olkaria, remains cheaper due to minimal operational expenses. He provided cost guidelines by technology—geothermal, hydro, and solar—to standardize future agreements.
The Energy and Petroleum Regulatory Authority (EPRA) CEO, Daniel Kiptoo Bargoria, assured MPs that updated tariffs by technology are regularly gazetted to guide negotiations and ensure fair pricing. Bargoria emphasized EPRA's role in thoroughly vetting PPA budgets to prevent unnecessary charges to consumers, adding that any unincurred costs are removed from final charges.
Meanwhile, Energy CS Wandayi reassured MPs of EPRA’s regulatory function, including publishing indicative tariffs for IPP negotiations. Ruaraka MP Tom Kajwang’ stressed Parliament’s commitment to fair, transparent PPA terms that align with national interests, citing recent negotiations involving major energy players as examples of the need for greater oversight.
The MPs remain resolute that lifting the moratorium on PPAs should only proceed once adequate taxpayer protections and regulatory transparency measures are in place.
