COFEK: Electricity Sector Association of Kenya (ESAK) must not be a cartel to neutralize President Kenyatta’s reform agenda on IPPs

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The Consumers Federation of Kenya (Cofek) welcomes the launch of the Electricity Sector Association of Kenya (ESAK).

But Cofek hopes that ESAK does not fit the bill for a cartel protection entity. Indeed, any attempts to deploy the new lobby to frustrate the current electricity sub-sector clean-up will be fiercely resisted.

The timing coincides with President Uhuru Kenyatta’s directive to reform Kenya Power and offer  transparency and accountability into the shadowy Independent Power Producers (IPPs) and the skewed Power Purchase Agreements (PPAs).

Every IPP must be made individually accountable for its’ PPA with Kenya Power. No group dynamics here.

It is our expectation that ESAK will not come to block the implementation of the John Ngumi IPPs taskforce recommendations and or neutralize President Kenyatta’s reform agenda on the electricity sub-sector. Every IPP must defend and negotiate their dealings as per contract. Government should not accept to negotiate with ESAK.

In any case, looking at the officials of ESAK, none appear to be a beneficial owner of the large and offending IPPs.

We must caution ESAK that Cofek will do everything in its’ ability to ensure that contractual breaches by IPPs around the PPA’s and their real owners are unmasked and perpetrators made accountable. Consumers have suffered enough.

Cofek is calling for probe of ESAK since its’ formation in 2019. We hope the Competition Authority of Kenya and the Ethics and Anti-Corruption Commission can act fast and investigate the real motive behind ESAK and their current launch,.

Cofek does not agree with the excuse that the PPAs cannot be retired on contractual grounds. Nearly all PPA’s were negotiated and signed before the 2010 Constitution was enacted. Accordingly, the transitional clauses should have been invoked to ensure that the said PPAs are consistent and compliant. As is, the PPAs are illegal, unconstitutional and void as they were not subjected to public participation. Accordingly, they fail the Articles 10m and 35 thresholds’, he added.

These IPPs are leeches to the Kenyan consumer. Rather than publicly announces that they will voluntarily cut tariffs in the PPAs as directed by President Kenyatta, they have grouped together with the sole aim of fighting the government attempt to sanitize the sector. As such, we must call them out for what they are!

We call upon the Kenyan media not to be cowed by ESAK and its’ intentions notwithstanding their financial muscle.

IPPs supply 25 percent of electricity bought by Kenya Power. Sadly, they only account for 47 percent or half of the utility’s power purchase costs. By way of comparison, Kengen supplies 72 percent of Kenya Power’s electricity but only accounts for 48 percent of power purchase costs.

In other words, the IPPs now sanitizing themselves as ESAK, have been and continue to undertake a robbery without violence on the Kenyan electricity consumers. There is misalignment between the share of IPPs contribution to the basket mix and the cost of power That cannot and will not go on – Secretary General, Consumers Federation of Kenya (Cofek)

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