Kenya Power Under Pressure As Unknown Firm Pockets Ksh50.2B From Its Sales

KEY POINTS:

  • Kenya Power is under immense pressure to reveal the identity of a firm that pocketed Ksh50.2 billion from its utility sales.
  • Kenya Power has remained reluctant to name the firm which is reportedly well connected to earn such a huge amount from a loss-making company.
  • In the financial year 2020, Kenya power electricity purchase costs stood at about Sh82.1billion.

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Kenya Power is under immense pressure to reveal the identity of a firm that pocketed Ksh50.2 billion from its utility sales.

Kenya Power has remained reluctant to name the firm which is reportedly well connected to earn such a huge amount from a loss-making company.

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Abdulswamad Nassir, chairman of the Public Investment Committee (PIC) of the National Assembly has given Kenya power by the close of today to table its 17 Power Purchase Agreements (PPAs) signed with the various firms.

In the financial year 2020, Kenya power electricity purchase costs stood at about Sh82.1billion.

According to Business Daily, PIC overruled Kenya Power managing director Bernard Ngugi who had attempted to forestall the disclosure citing confidentiality.

“Power Purchase Agreements have contractual provisions which would require more time to obtain consent and authorization from court processes because of confidentiality clauses such as Non-Disclosure Agreements,” the official said, prompting Mr. Nassir to issue a directive that the documents be tabled with the Office of the Clerk of National Assembly.

The committee also rejected Mr. Ngugi’s defense that the disclosure would be unhelpful since a government-appointed task force was already reviewing them.

President Uhuru Kenyatta in March appointed a task force to review PPAs signed between Kenya Power and all electricity generators with a goal of renegotiating energy prices and other terms downwards.

The team is chaired by boardroom veteran John Ngumi and will has 15 other members drawn from the private and public sectors.

Kenya Power’s PPAs remain controversial amid concern that the firm has signed contracts committing it to take more electricity than it can sell, leaving it to pay onerous capacity charges to energy producers even when their plants are idle.

Average annual growth in consumption has been only 3.5 percent in the last 5 years, much lower than the 6 percent demand growth projection assumed in the tariff, despite the doubling of the connection base during the period.

SOURCE: BUSINESS DAILY

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