KenGen to Sell Power Directly to Consumers Under the New Energy Act

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Rebecca Miano, the KenGen MD, said the energy generating firm will target large power consumers by selling to them directly. To implement this strategy, Kenya Electricity Generating Company(KenGen) will require a distribution license.

Notably, the targeted large power consumers account for more than half of the overall power sales revenues. KenGen’s plan may further lead to more cash flow challenges currently experienced by Kenya Power.

In implementing their plan, KenGen will mainly rely on the already existing energy distribution network built by Ketraco. The Kenya Electricity Transmission Company, commonly known as Ketraco, is currently in charge of power distribution.

KenGen’s plan to distribute energy directly to customers is according to the provisions of the 2019 Energy Act. The law gives KenGen a provision to sell power directly to consumers, and it brings to an end the 100 years long Kenya Power dominance.

The law clearly states that Kenya Power should allow other licensed power distributors to use their distribution network. However, the distribution network remains the Kenya Power Property, and the interested dealers should pay for the infrastructure. However, there are no detailed provisions on how the companies can go about it.

The Ministry of Energy is expected to be at the forefront in formulating the regulations to govern companies looking for opportunities to join the energy sector and begin selling power.

 

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Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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