Kenyans to pay Sh27b for 18 years to sustain wind firm's operations

Kenyans will be coughing up to Sh27.1 billion (EUR 182.1 million) for the 100MW (megawatts) Kipeto wind power project for the next 18 years, whether they use it or not.

The Senate Energy Committee yesterday put the management of Kipeto Energy to task over its high charges for generating electricity compared to KenGen wind power, despite them being in the same region.

Dr Kenneth Onyango who appeared before the Committee on behalf of the company said the high cost of power should be attributed to the long periods the firms take before they start producing electricity, and become economically feasible.

"The pace at which power is generated in the country should be increased if all stakeholders are committed towards the reduction of the cost of power, bearing in mind that it takes long to generate power, otherwise we will be lamenting on the high cost of electricity for a long time," said Dr Onyango.

The statements of accounts submitted to the Senate Energy Committee showed that the total amount due to Kipeto Energy is Sh3.6 billion ($26.5 million).

The Committee chaired by Nyeri Senator Wahome Wamatinga was informed that the Independent Power Producers (IPPs) compensated land owners in Kiserian where the firm is located Sh3.2 billion, with one land owner being compensated Sh1 billion for a 4km stretch.

Onyango informed the committee that their company had to negotiate with the community to lease the land for 30 years, a move he argues was tedious and took long to conclude.

"Our engagement with the local community was very critical before we commenced this project, with the delays experienced having an effect on the tariffs. However, we believe that if cheaper generation of power is allowed, the cost of electricity in the country will definitely come down," said Dr Onyango.

Bungalows for households

He told the Senate Energy Committee that the firm had spent Sh675 million to construct three and four-bedroom bungalows for 84 households who were displaced from the land to pave the way for the setting up of Kipeto power.

Onyango said that even though the plant has the capacity to generate 100MW, KPLC curtails its uptake from 7am to 5pm and uses the power produced by the Kipeto from 5.30pm to around 10pm because there is high power usage during the hours.

Senators Ledama Ole Kina (Narok) and Edwin Sifuna (Nairobi) wondered why the firm was billing Kenyans for projects they deem corporate social responsibility (CSR).

"Let it be clear that you are not doing any CSR programmes since you are billing us the cost of land compensation and you are also billing us the cost of construction of the houses of the people you displaced," said Kina.

Sifuna asked why Kipeto Power, owned by four Kenyans would register its ownership in an offshore tax haven in Mauritius.

Onyango said the four Kenyans had to register the company in Mauritius because local banks refused to finance the project.