Rédaction Africa Links 24 with Kenyans.co.ke
Published on 2024-02-28 17:21:29
The signing of a Memorandum of Understanding (MoU) between African Trade and Investment Development Insurance (ATIDI) and key government energy agencies will now guarantee prompt payments to Independent Power Producers (IPPs). Energy Cabinet Secretary Davis Chirchir announced the regional liquidity support facility MoU on Wednesday, February 28. The MoU was signed between ATIDI, Kenya Power, and Kenya Electricity Transmission Company Limited (KETRACO), with National Treasury Njuguna Ndung’u and CS Chirchir as signatories.
IPPs are non-utility private companies that own power stations and generate revenue by selling electricity to Kenya Power. These companies have faced losses in the past due to delays in disbursements from the National Treasury. The Regional Liquidity Support Facility (RLSF), initiated by ATIDI, serves as a guarantee instrument to protect IPPs. It supports small and mid-scale renewable energy projects with a capacity of up to 100 MW by safeguarding against the risk of delayed payments by public off-takers.
The RLSF program was launched in 2017 and has benefitted IPPs in various regions of Africa, including West Africa, Southern Africa, East Africa, and Central Africa. Apart from Kenya, other East African countries eligible for the RLSF include Burundi, Uganda, Tanzania, South Sudan, Rwanda, and the Democratic Republic of Congo. Across the continent, a total of 21 countries qualify for the support facility.
After signing the MoU, CS Chirchir accompanied President William Ruto to Narok for a tour of the KETRACO Converter Station. KETRACO plays a crucial role for IPPs as it operates and maintains high voltage electricity transmission grids and regional power interconnectors in the country.
The collaboration between ATIDI, Kenya Power, KETRACO, and the National Treasury signifies a positive step towards ensuring the financial stability of IPPs in the energy sector. By guaranteeing prompt payments through the RLSF, these companies can conduct their operations effectively without facing financial constraints due to delayed payments.
It is essential to recognize the importance of supporting IPPs as they play a significant role in providing electricity to the national grid. With the assurance of timely payments, these companies can continue to contribute to the energy sector’s growth and development. The MoU sets a precedent for cooperation between government agencies and private entities to foster a conducive environment for sustainable energy production and distribution in Kenya and across Africa.
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