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CS Chirchir calls on power sector players to lower cost of electricity

The Ministry of Energy and Petroleum has called for collaboration among all players in the power sector in a bid to lower the cost of electricity.

The ministry highlighted that power generators, transmitters, distributors and retailers have a role to play in the sustainability of the sector.

The ministry’s Cabinet Secretary (CS) Davis Chirchir said that the government of Kenya over the years has implemented several reforms in the energy sector with the aim to liberalize it in order to spur investment and improve efficiency in service delivery.

“Kenya’s energy sector has advanced in electricity generation, transmission, distribution, and retailing arising from implementation of various reforms, notably the Electric Power Act 1997 (Repealed), Sessional Paper no. 4 of 2004, Energy Act 2006 (Repealed) and the current Energy Policy 2018 and the Energy Act 2019,” Chirchir said, noting that Kenya was one of the first countries in Sub-Sahara Africa to institute market-oriented power sector reforms in the 1990s.

Chirchir noted that the current government came into office focusing on transforming the economy while focusing on inclusivity especially for those in the bottom of the pyramid through the Bottom-Up Economic Transformation Agenda (BeTA), which calls for lowering of cost of living, as well as promoting wealth creation initiatives.

Speaking during a briefing at Radisson Blu Hotel in Nairobi on Monday, the CS stated that the National Assembly has called upon The Ministry of Energy to lower the cost of electricity that will in turn lower the cost of living.

“The National Assembly called upon the Ministry to engage with power producers with a view to reducing the cost of power and developing suitable strategies for engagements with power producers in order to provide relief for electricity consumers and at the same time ensure the long-term viability and sustainability of the energy sector,” Chirchir said.

The CS pointed out that the Energy Sector is a great catalyst of national development, and the Ministry wishes to have a consultative meeting on sustainable electricity supply in Kenya including strategies aimed at optimizing the cost of electricity.

The various policy and regulatory reforms in the sector have resulted in increased private sector participation in power generation easing pressure on exchequer for provision of funds to build power plants. Independent Power Producers (IPPs) therefore play a critical role in provision of power so as to free government resources.

The Ministry of Energy and Kenya Power have set up a team to engage with themselves by evaluating on how to bring down the electricity cost to lower the cost of living by the end of this year.

Chirchir lamented that due to competing government priorities from other sectors like education, health and security and withdrawal of support from development partners in the 1990’s, investment in the power sector dwindled sharply.

“The power sector was not able to fill this void due to the need to keep electricity tariffs down. In order to fill the gap, power generation was opened up to private sector participation in 1996. To undertake this transparently, it also became necessary to unbundle the sector further and bring in regulation in 1997,” CS Chirchir stated.

Further, he disclosed that the reform efforts and strategic targets followed and in 2008, Kenya’s 2030 Vision which encompasses social and economic goals, set a new generation target of 23,000 MW by 2030.

Speaking at the same function, Energy Principal Secretary Alex Wachira instructed investors to buy petroleum goods with Kenyan shillings as he insisted that this will ease the rising cost of living.

“Why do our Kenyans IPPs need dollars to buy petroleum and other goods?” Wachira posed.

By Ali Sheikh Mohamed and Emma Jolly Wambui

 

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