The National Assembly has ordered a sweeping disclosure of who owns the country’s Independent Power Producers (IPPs), directing the Business Registration Service (BRS) to submit a full list of shareholders and beneficial owners within six months.
- •The disclosure mandate for IPP ownership aims to address persistent public distrust in the sector, where complex offshore shareholding structures and politically exposed partners have fueled speculation about hidden beneficiaries and inflated tariffs.
- •The measure forms the centerpiece of a parliamentary decision to finally lift a 2-year, 8-month moratorium on new Power Purchase Agreements (PPAs), a freeze that had stalled private investment and complicated Kenya Power’s already costly procurement mix.
- •Lawmakers approved a new currency framework allowing future PPAs to be denominated in Kenya shillings, foreign currency, or a hybrid of both.
The approach marks a compromise from earlier hardcore proposals that would have mandated shilling-only contracts, a stance that bothered investors who finance their projects in dollars or euros. Under the hybrid model, local operating costs and taxes will be priced in shillings, while financing and debt obligations can remain in hard currency.
The move comes as public scrutiny intensifies over the price of privately generated electricity. In the year to June 2024, Kenya Power paid KSh 73.7 billion to IPPs; about 60% of all power purchase costs despite the companies supplying just 41% of the electricity.
“We have agreed as a committee that any agreement must not go beyond 7 cents per kWh. We find that some of these IPPs are exploiting Kenyans by charging almost KSh 23 per kWh,” Nakuru East MP David Gikaria said.
State generator KenGen provided the remaining 59%, yet collected only 40% of the payouts, according to recent disclosures. On average, IPP electricity cost more than double KenGen’s, with geothermal units from private suppliers hitting KSh 17.28 per kilowatt-hour versus KenGen’s KSh 8.24.
Lawmakers have also ratified that all amendments or variations to power contracts will now require review by the Attorney General. The step gives the government tighter oversight of contract renegotiations, which have historically occurred deep inside sector bureaucracies and contributed to opaque pricing outcomes.
The National Assembly also directed the Energy Ministry and the Energy and Petroleum Regulatory Authority (EPRA) to adopt competitive auctions for new power projects, mirroring South Africa’s Independent Power Producer Procurement Programme.
The auction system is expected to replace negotiated deals with market-driven bidding that aligns tariffs with the Least Cost Power Development Plan. Kenya has long relied on bilateral negotiations with IPPs, a process that critics say helped lock the utility into expensive capacity charges that compel Kenya Power to pay for electricity whether it is consumed or not.
The moratorium’s lifting clears the way for new generation projects after years of stagnation, but the reforms signal that future deals will face far more scrutiny. The potency of the new transparency rules, currency flexibility, and competitive auctions to reduce costs for electricity consumers will depend on how aggressively they are implemented.
