Ministry of Energy maintains that the second tranche of 15% power retail tariff reduction is on course as it negotiates with Independent Power Producers(IPPs).
Its formal engagements with IPPs is being undertaken within the ongoing wide-ranging changes in Kenya’s energy sector.
The negotiation process, which began in March 2022, aims to enable the Ministry to provide clean, reliable and sustainable lower-cost power.
The Ministry has engaged in extensive negotiations with 77 IPPs, establishing and clarifying a pathway to delivering the subsequent 15% reduction in power tariffs.
“We urge the public and media to avoid unqualified speculation on the negotiation process and allow the Government of Kenya to provide the necessary updates on the reforms in the energy sector,” said the Ministry’s Communication Office.
The Ministry urges IPPs and all stakeholders to reciprocate the Government’s good faith as negotiations are finalized and assured that it will provide further updates.
In line with President Uhuru Kenyatta’s pledge to Kenya, Monica Juma, Kenya’s Energy Cabinet Secretary, in January 2022, confirmed the gazettement of lower power tariffs by 15%, effective December 2021.
A further reduction of 15 per cent was to be effected within the first quarter of 2022.
Due to the first 15% tariff reduction, manufacturers experience a decrease in cost upwards of KSh 2.67 to KSh 3.64 per unit of power, based on their respective tariff and consumption levels.
Costly Power Purchase Agreements, taxation, high pump prices, numerous tax regimes and levies, as well as VAT and fuel adjustment, are factors seen as pushing up the cost of power in Kenya.
Also contributing to Kenya’s expensive power are depressed demand growth and inefficiencies in the generation and transmission systems.
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