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Did Kenya Power pay Sh17 billion for 'ghost' electricity?

Lake Turkana Wind Power turbines at Sarima, Laisamis, Marsabit County on March 15, 2017. [Ali Abdi, Standard]

The National Assembly will investigate why Kenya Power paid Sh17 billion for wind power that was not supplied.

The Energy Committee will also look into possible conflict of interest by the company's board chairperson, Vivienne Yeda.

Ms Yeda is also the director general of the East African Development Bank, which was a co-financier of Lake Turkana Wind Power (LTWP) plant.

The probe follows a statement by Baringo North MP Joseph Makilap, who sort clarification on the deal between KPLC and LTWP.

Mr Makilap had asked the Speaker to order the committee to establish whether the agreement between Kenya Power and LTWP was the reason for the high cost of power.

The MP noted that KPLC paid LTWP plant, the second biggest supplier of electricity to the national grid, Sh17 billion for power not utilised by Kenyans.

“Why did Kenya Power pay for energy from the Lake Turkana Wind Power that was never utilised? Is there a correlation between Kenya Power paying for power not delivered by the LTWP and the high cost of power in Kenya?” said the MP.

Baringo North MP Joseph Makilap. [Moses Kipsang, Standard]

He wants the National Assembly to probe payments to LTWP in 2017 before it started feeding electricity to the national grid.

The payments, government and LTWP have in the past explained, were a penalty for failure to provide the firm with a power transmission line by early 2017.

During the signing of the agreement, the Power Purchase Agreement (PPA) between Kenya Power and LTWP provided that there should be a penalty in the event that the State does not have a line between Marsabit – where the plant is located – and Suswa for redistribution to the rest of the grid.

Mr Makalip now claims that the billions paid could be the reason Kenyans are suffering due to the high cost of electricity

In the petition, the MP also questions the role of Ms Yeda.

"There is possibility of conflict of interest whereby the director general for the East Africa Development Bank, the bank that provided the loan to finance the project, Ms Yeda Apop Vivienne, is also chairperson of KPLC board of directors," said Mr Makilap.

Ms Yeda was appointed KPLC chair in 2020. She has been serving at the EADB from 2013.

LTWP started feeding power to the national electricity grid in October 2018.

In 2017, LTWP kicked up a storm after it demanded payment for Deemed Generated Energy after the government failed to live to its end of the agreement and have a transmission line ready between Loyangalani and Suswa in early 2017.

Logistics workers offloading a turbine at the port of Mombasa, March 1, 2016. [Gideon Maundu, Standard]

The power line, delayed after the initial contractor Isolux experienced a financial hiccup, was completed in August 2018 and enabled supply of power.

LTWP demanded Sh19.87 billion but following a series of meetings by the firm, the Energy Ministry and Kenya Power, the penalty was negotiated to Sh17 billion.

The tariff hike was effected in June 2018 and will stay until May 2024.

This is the payment the MP wants Parliament to investigate.

LTWP and the Energy ministry early this year told the parliamentary Public Investments Committee that the penalty was based on estimates of how much power LTWP could produce as there was no data at the time showing patterns of power generation.

LTWP was also one of the issues covered by the Presidential Task Force on Review of Power Purchase Agreements.

In its report, the team noted that the plant was prone to high intermittency and that it rarely achieved continuous power production matching its 310MW installed capacity in 2020.

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