Independent Power Producers (IPPs) will now be guaranteed prompt payments following the signing of a Memorandum of Understanding (MoU) between African Trade and Investment Development Insurance (ATIDI) and key government energy agencies.
Speaking on Wednesday, February 28, Energy Cabinet Secretary Davis Chirchir explained the regional liquidity support facility MoU was signed between ATIDI, Kenya Power and Kenya Electricity Transmission Company Limited (KETRACO).
National Treasury Njuguna Ndung’u and CS Chirchir were signatories of the MoU.
IPPs are non-utility private companies that own power stations and earn billions of shillings through selling electricity to Kenya Power.
In the past, the companies have been incurring losses due to delays in disbursement from the National Treasury.
The Regional Liquidity Support Facility (RLSF) is a brainchild of ATIDI and acts as a guarantee instrument to IPPS.
“RLSF supports small and mid-scale renewable energy projects with an installed capacity of up to 100 MW by protecting the IPPs against the risk of delayed payments by public off-takers,” ATIDI explains how it is beneficial for individuals selling electricity to Kenya.
The program though noble in Kenya was launched in 2017 and has benefited IPPs in West Africa Southern Africa, East Africa, and Central Africa.
In addition to Kenya, other East African countries eligible for the RLSF include Burundi, Uganda, Tanzania, South Sudan, Rwanda, and the Democratic Republic of Congo.
Across the African continent, a total of 21 countries qualify for the support facility.
It is worth noting that immediately after signing the Memorandum of Understanding (MoU), CS Chirchir accompanied President William Ruto to Narok during a tour of the KETRACO Converter Station.
KETRACO is key to IPPs as it operates and maintains high voltage electricity transmission grid and regional power interconnectors in the country.
