Kenya Power May Lose Distribution Monopoly With New Law

Jul 05, 2018
Proposed legislation opens electricity retail to competition and Geothermal producers to pay royalties of up to 5% of sales
 
Lawmakers in East Africa’s biggest economy approved a new law that could abolish Kenya Power Ltd.’s monopoly on grid-electricity distribution.
 
With the proposed new legislation, which still needs presidential approval, the Energy Regulatory Commission will license new companies to sell power and take away Kenya Power’s control over the dispatch center, which determines what energy sources will feed the national grid.
 
The Energy Bill also introduces royalties from geothermal generation, parliamentary majority leader Aden Duale said by phone from the capital, Nairobi. Africa’s biggest geothermal electricity producer will expect between 1 percent and 2.5 percent of revenue during the first decade of a geothermal license being issued.
 
The levy will then climb to between 2 percent and 5 percent, with a fifth of the proceeds remitted to regional governments, 5 percent to the local community, and the rest to the national government.
 
 
Source: Bloomberg News

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