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The Ministry of Energy of Kenya has lifted a ban on negotiations for new power purchase agreements (PPAs) while also providing clarification on existing processes and approval mechanisms. This recent development is expected to spur investments into the renewable energy sector.

The ban on PPA negotiations was previously put in place by the Ministry to prevent an increase in power bills due to idle capacity charges charged by independent power producers (IPPs). Accordingly, President Uhuru Kenyatta canceled all ongoing PPA negotiations under Kenya Power following the recommendation of a taskforce on power sector reforms.

Future PPA negotiations will be in line with the Least Cost Power Development Plan (LCPD). This system is designed to leverage the country’s renewable energy sources, thus providing more incentive to invest in the renewable energy sector. In line with this, the Ministry of Energy has issued guiding principles to LCPD for the integration of renewable energy and emerging technologies.
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