The PPA moratorium was imposed in 2018 to allow for the review of existing agreements, which a government taskforce blamed for expensive power prices, noting that they were skewed to favour independent power producers (IPPs). This has caused Kenya to increasingly rely on imported power supplies from neighbouring Ethiopia and Uganda, with the share of imported electricity on the national grid rising over the past several years.
Kenya’s largest private sector umbrella body welcomed the lifting of the moratorium, telling Semafor that significant investment in power generation and high-voltage transmission lines was necessary to mitigate the ongoing loadshedding.
James Mwangi, head of energy at the Kenya Private Sector Alliance (KEPSA), said that the ongoing loadshedding emphasized “the urgency of us getting additional generation capacity.” He said rationing so far had been “subtle” to shield the largest customers of state-owned Kenya Power, the nation’s main power distributor, most of whom are industries located in key cities including Nairobi and Mombasa.
“It’s important to business to make sure the power is available, and that it can get to where it’s needed. Cut the system losses, and onboard power at a cheaper rate that is still attractive to investors,” Mwangi noted.
KEPSA also expects energy auctions to be rolled out “within the next two to three years” to offer businesses competitive pricing for power, Mwangi said. Energy auctions, he said, would aid in boosting transparency by allowing energy producers to place bids to power various projects based on their specific energy demands, including data centers which he said represented a major opportunity for Kenya. He said there was “great interest” from global energy producers in the Kenyan market, particularly those in the renewables space.