President Uhuru Kenyatta has stated that from this month, the cost of power will be reduced by 15%.
The Head of State said this will be the first tranche of the energy cost reduction, with the remaining 15% to be implemented early next year in a move aimed at cushioning Kenyans and entrepreneurs from high energy costs, during the Jamhuri Day Celebrations at Uhuru Gardens on Sunday.
“In honor of this vow to the nation, and in response to individual consumers’ and businesses’ worries about the excessive cost of electricity, I am glad to announce to the nation that the cost of electricity will be reduced in two tranches of 15% each,” the president added.
According to the President, the Ministry of Energy has begun discussions with Independent Power Producers (IPP) to renegotiate power purchase agreements.
In October, the government stopped all pending and ongoing contracts with independent power producers while the utility firm evaluates existing arrangements in order to reduce the country’s electricity costs.
This comes after it was revealed that in FY2020, IPPs accounted for 47% of power procurement expenses but just 25% of power quantities, whereas KenGen accounted for 48% of costs and 72% of volumes.
This generated concerns about the amount of tariffs paid to IPPs in relation to the capacity acquired and the nature of the contract terms.
