CS Ndung’u and AG Muturi Clash on Kenya Power Agreements
Attorney General Justin Muturi has been contradicted by National Treasury Cabinet Secretary Njuguna Ndung’u regarding the latter’s involvement in Power Purchase Agreements.
Ndung’u told the Energy Committee that the Office of the Attorney General gives Independent Power Producers (IPPs) legal approval for letters of support.
The statement contradicted the assertion of the Attorney General that his office was not involved in the signature of agreements between PPAs and Kenya Power.
Attorney General’s Office is the primary issuer of Government Support Measures (GSMs), which include letters of support to IPPs, according to Ndung’u.
While defending the issuance of support letters to IPPs, Ndung’u explained to the Committee that they serve as contingent liabilities.
“The letter of support is a mechanism used to protect the government as well the private sector,” Ndung’u clarified.
The committee headed by Mwala representative Vincent Musyoka Kawaya has been investigating the country’s high electricity prices.
Ndung’u, who appeared before the committee on October 12, 2023, demanded access to contracts signed by Kenya Power and IPPs.
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Muturi stated that the agreements were signed without the input or counsel of the Attorney General’s Office.
Muturi stated that his office must understand the implications of renegotiating or terminating the contracts.
“We are just being told that it will be expensive to terminate the contracts but nobody is telling us how much. We must know the consequences of terminating these contracts,” he said.
In the majority of instances, the cost of power that IPPs agree with the government has been higher than the cost of electricity produced by state-owned firms such as KenGen.
Chris Kirigua, Director General for Private Public Partnerships, who had accompanied Ndung’u, cited the need to evaluate the PPAs on Wednesday.
“There is a need for a review of the contracts. We need to look at the contracts and what was provided in the beginning. If it is established that something is wrong, it shouldn’t be tolerated,” Kirigua said.
MPs were also concerned about the impact of various taxation measures and levies on the overall cost of electricity and how they can be managed to provide Kenyans with relief.
In his response, Ndung’u informed the committee that the only national tax levied on electricity is VAT at a rate of 16% and that the elimination of this tax would result in discrimination in the VAT tax regime.
CS Ndung’u and AG Muturi Clash on Kenya Power Agreements
