National Assembly urged to end seven-year ban on new power deals to avert rationing
The freeze has been in place since 2018, when Kenya Power was barred from signing additional contracts pending an audit into expensive existing deals that saw consumers denied cheaper electricity.
The Ministry of Energy has urged Parliament to end the seven-year ban on new power purchase deals, in a bid to boost Kenya Power’s generation capacity and prevent rationing during peak hours.
The freeze has been in place since 2018, when Kenya Power was barred from signing additional contracts pending an audit into expensive existing deals that saw consumers denied cheaper electricity.
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Energy Principal Secretary Alex Wachira on Wednesday said the ministry and the National Assembly's Departmental Committee on Energy have already agreed to lift the moratorium, with legislators expected to debate a report on the matter once the House resumes sittings next week.
“We have been in conversations with the House committee, and a report is ready. We are anticipating that next week, when Parliament resumes, they shall lift the moratorium,” Wachira said during the Sustainable Energy Conference in Olkaria, Naivasha.
Wachira had earlier indicated that Parliament would lift the freeze by June this year, with Kenyans keen to see if his latest promise on ending the ban on Power Purchasing Agreements (PPAs) will come to pass.
The freeze, coupled with rising local consumption, has significantly reduced Kenya Power’s reserve margins to below four per cent, forcing the utility to ration supply in some regions to maintain grid stability during peak demand hours. Global industry standards recommend reserve margins between 20 and 35 per cent.
Kenya recorded seven new demand peaks in 2024 alone, highlighting the growing electricity demand from homes, industries and businesses. Peak demand this year has already increased by over 45 megawatts. Kenya currently has an installed capacity of 3,811.60 megawatts of electricity.
To address the shortfall, Kenya Power is also negotiating with Ethiopia Electric Power (EEP) for an additional 50 to 100 megawatts, which would supplement the 200 megawatts already being imported under a 27-year agreement.
However, the utility has warned that major disruptions on the transmission line from Ethiopia could trigger a power crisis, underlining the risks of relying heavily on imports.
The Cabinet lifted the moratorium on new PPAs in February 2023, but MPs reinstated it, saying they first needed to scrutinise existing agreements between Kenya Power and power producers.
The Sustainable Energy Conference in Naivasha, which brought together senior government officials, private sector players, and financiers, is seen as a platform to push for the expansion of the country’s clean energy potential.
Lifting the freeze on PPAs will be a priority agenda item when Parliament resumes next week.
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