National Assembly Minority Leader Opiyo Wandayi has petitioned Parliament to reconsider the moratorium on Power Purchase Agreements (PPAs), arguing that it has hindered efforts to secure affordable electricity rates from Independent Power Producers (IPPs).
Speaking in Naivasha during a retreat with the National Assembly Departmental Committee on Energy, Wandayi emphasized that the restrictions imposed in 2023 have negatively impacted negotiations for better PPA terms. “Even in cases where we have received better revised proposals, the moratorium has impeded every effort for negotiations. The net result has been that we get stuck with the current rates,” he stated.
The Principal Secretary for Energy, Alex Wachira, who accompanied Wandayi, highlighted Kenya’s increasing energy demands amid declining contracted capacity due to retired power plants, aging infrastructure, and inadequate new generation projects.
“The country is already experiencing a power supply shortfall and demand management issues, which will worsen if the moratorium is not lifted,” Wachira warned. He further noted that the continued restrictions could lead to increased power rationing during peak hours, power outages, and higher electricity costs due to increased reliance on thermal power plants and imported energy from Ethiopia, Tanzania, and Uganda.
According to the Ministry of Energy’s 2024-2043 Least Cost Power Development Plan (LCPDP), Kenya’s electricity demand is projected to grow by an average of 6% annually over the next two decades, reaching 2,871MW by 2028 and 8,152MW by 2043. To meet this rising demand, the government has earmarked various power generation projects, including storage solutions such as pumped hydro storage and Battery Energy Storage Systems (BESS), which are vital for enhancing grid security.
The moratorium on PPAs was initially imposed in September 2021 by the Presidential Task Force on the Review of Power Purchase Agreements to curb high electricity costs. Although the Cabinet lifted the ban in February 2023 to address energy security concerns, Parliament reinstated it in April 2023, directing the Ministry of Energy and Kenya Power to develop strategies for reducing electricity costs while ensuring sustainability in the sector.
Wandayi stressed that PPAs play a crucial role in expanding Kenya’s energy infrastructure and attracting investment in the sector. “Power Purchase Agreements are essential for strengthening the country’s energy security and ensuring long-term sustainability,” he added.
With Kenya facing growing electricity demand and supply challenges, the call to lift the moratorium reignites debate on balancing affordability, investment, and energy security.
