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Kenya Power and Ethiopian Electric Power have signed a Power Purchase Agreement (PPA) that will see Ethiopia provide Kenya with energy.
The signing was the actualising of the power trade from 1 November 2021.
The agreement was signed by Kenya Power’s Acting Managing Director Geoffrey Muli and Ethiopian Electric Power (EEP) Chief Executive Officer Ashebir Balcha.
In the first three years, Kenya will get a maximum firm capacity of 200MW and thereafter a maximum firm capacity of 400MW for the remainder of the 25-year PPA.
The agreed tariff will see Kenyans enjoy clean, reliable and affordable power. The agreement is also expected to boost Ethiopia’s annual energy export trade, which currently sells electric power to Sudan and Djibouti. The neighbouring nations imported 1,700GWh of electricity in the last twelve months.
EEP will be the second largest power supplier to Kenya Power after the KenGen Hydros Eastern Cascade, with a contracted 600MW capacity.
To augment and fast-track reforms in the energy sector, Kenya’s President has appointed a task force that handed its report in September 2021 with recommendations to review PPAs signed with Kenya Power in a bid to lower power costs.
As part of the ongoing reforms in the energy sector, the Kenyan government, a week ago, effected a 15% reduction in power tariffs.
The reduction is part of a 30% reduction promise and will cover the period between January and December 2022, reflecting bills covering the December 2021 period.
The signing follows the completion of the $1.26 billion Kenya-Ethiopia Electricity Highway Project involving a 1,068km-long power transmission line and two AC/DC converter stations at both ends.
The project will ensure access to reliable and affordable energy to around 870,000 to 1.4 million Kenyan households, of which 18% will be located in rural areas, the Ministry of Finance in Ethiopia said.
The ministry revealed that the trial transmission of power would start in a few weeks, ahead of a scheduled launch of full capacity power export in November 2022. |
