- President Kenyatta’s task force submits report
- Gives recommendations for Kenya Power
- Kenyatta gives a four-month deadline for the review of the PPAs
The Task Force inaugurated by President Uhuru Kenyatta to review the existing Power Purchase Agreements (PPAs) between the state-owned utility, Kenya Power and Independent Power Producers (IPPs), has submitted its report to the President. The report also gave some recommendations on the PPAs.
The recommendations are as follows;
- Review and Renegotiations with Independent Power Producers (IPPs) to secure an immediate reduction in Power Purchase Agreements (PPA) tariffs within existing contractual arrangements;
- Cancellation with immediate effect of all unconcluded negotiations of Power Purchase Agreements and ensure future PPAs are aligned to the Least Cost Power Development Plan (LCPDP);
- Fast-track and deepen the ongoing reforms at KPLC to restructure it into a commercial entity that is both profitable and also capable of delivering efficient and cost-effective electricity supply to all consumers;
- Kenya Power and Lighting Company (KPLC) to take the lead in the formulation and related PPA procurement of the Least Cost Power Development Plan (LCPDP);
- KPLC to institute Due Diligence and Contract Management frameworks for PPA procurement and monitoring along the lines of the drafts provided by the Taskforce;
- KPLC to institute one and five-year rolling demand and generation forecasts and associated models;
- KPLC to adopt standard PPAs and proposed Government Letters of Support (LOS) along the lines of the drafts provided by the Taskforce;
- KPLC to undertake a forensic audit on the procurement and system losses arising from the use of Heavy Fuel Oils (HFOs); and
- In line with the constitutional imperative for transparency in the public sector, KPLC’s annual reports should include the names and beneficial ownerships of all IPPs with which it has contractual arrangements.
Following the recommendations from the task force, President Uhuru Kenyatta has given Kenya Power four months to review its existing PPAs.