Kenya News

President Kenyatta orders immediate cost reduction reforms at KPLC

President Uhuru Kenyatta has ordered the Ministry of Energy to immediately institute changes as recommended by a taskforce he formed to reduce the cost of energy.

In a statement sent to news rooms, Uhuru welcomed recommendations of a taskforce formed in March 2021 to establish a path towards the reduction of the cost of electricity by over 33 percent within four months.

The president directed the Energy Cabinet Secretary, Charles Keter, to immediately secure the implementation of the recommendation of the Presidential Taskforce on Review of Power Purchase.

He noted that the cost reduction would be achieved through the reduction of the consumer tariffs from an average of Ksh24 per kilowatt-hour to Ksh16 per kilowatt hour, which is about two-thirds of the current tariff.

“The consequence of the proposed interventions is that a consumer who previously spent Ksh500 per month on electricity shall by 31st December 2021 pay Ksh330 per month. This cost reduction will be achieved,” reads an excerpt of the statement.
Other recommendations by the task force include review and renegotiations with Independent Power Producers (IPPs) to secure immediate reduction in Power Purchase Agreements (PPA) tariffs within existing contractual arrangements.

The task force advocated the 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).

It recommended the fast-tracking and deepening of 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.

KPLC was recommended to institute Due Diligence and Contract Management frameworks for PPA procurement and monitoring along the lines of the drafts provided by the Taskforce.

The President expressed gratitude to the Taskforce for their sense of civic duty and professionalism and for expeditiously discharging their mandate.

He also conveyed his gratitude to the new Board of Kenya Power for steering the ongoing ground-breaking reforms in the nation’s anchor utility company.


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