KenGen Chief Executive Officer Peter Njenga on Thursday, February 29, detailed how Kenya's decision to adopt Independent Power Producers (IPPs) saved the country from frequent blackouts.
In a media interview, Njenga highlighted that the decision faced resistance initially due to concerns about increased competition in the market.
However, he noted that in the long run, the concept of Independent Power Producers (IPPs) providing an alternative power source helped alleviate demand in the market.
In contrast, Njenga drew comparisons to Kenya's neighbours, including Tanzania, which has experienced frequent power blackouts in recent months due to disregarding the idea of IPPs.
"The incoming of the independent power producers was a blessing in disguise. The other countries in the region did not take on board the idea of bringing in other people in power generation and they are now suffering today very high levels of rationing of power and blackouts," Njenga told Spice FM.
"In the case of KenGen, because of our old generating systems being automatised, our prices are relatively cheaper as compared to the cost of other producers."
IPPs are private companies that generate power and sell it in bulk to Kenya Power through a Power Purchase Agreement (PPA). Kenya opened its market to IPPs in the mid-1990s and has since become one of the most developed power sectors in Sub-Saharan Africa.
Additionally, the KenGen boss urged Kenyans to cope with the current high electricity prices but expressed confidence that the cost would lower due to the ongoing rains.
"It has been a concern even for me regarding the high cost of electricity. But it is good for us to look back at history and ask ourselves, is it rather we have a slightly high cost of electricity or no electricity at all? The answer in most people's minds would be that we would have the slightly higher cost," he added.
"With the rains that have been ongoing, then we can confirm that with more generation of hydro, the cost of electricity comes down."
Tanzania has been grappling with frequent power blackouts across the entire region, with the latest incident occurring on February 3, 2024, due to a technical fault in its national grid.
The country's challenges have been exacerbated by power rationing, which has been in effect since September of the previous year. This situation has had a significant impact on businesses that rely on consistent access to electricity for their daily operations.
In response to the crisis, the Tanzanian government has announced plans to launch two power plants by March 2024 to bolster the provision of power from the Julius Nyerere Hydropower Project.
