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Kenya Power to Spend More than $1-Million on Legal Fees in Tariff Negotiations

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Kenya Power will pay an amount of Sh140-million ($1.2-million) in legal fees linked to the renegotiation of power purchase agreements (PPAs) signed with electricity-generating companies.

According to Business Daily, the electricity distributor revealed the award of the legal tender to two firms in regulatory disclosures. A joint venture comprising British lawyer and energy dispute-focused practitioner Michael Sullivan will earn Sh123.97-million ($1.1-million). Nairobi law firm NBMA Advocates will score Sh16.77-million ($144 506,68).

As per Business Daily, Sullivan specialises in energy, banking, and other commercial disputes.

The directors of NBMA Advocates are:

  • Nigel Shaw
  • Binti Shah
  • Mahesh Acharya
  • Amar Grewal Thethy

Kenya Power’s decision to seek the services of the legal experts comes after President Uhuru Kenyatta appointed a task force to review PPAs signed between Kenya Power and all electricity generators in March 2021, with a goal of renegotiating the energy prices and other terms downwards.

In February 2021, the Ministry of Energy asked independent power producers (IPPs) who sell power to Kenya Power to lower tariffs imposed on the national power distributor. This according to Business Daily, came after opposition from the foreign firms.

The utility’s goal is to lower Kenya Power’s costs and offer the utility headroom to cut retail tariffs by an additional 15 percent without falling into losses. It already cut retail tariffs by 15 percent in January, trying to meet the plan to lower system losses halfway.

The task force that was dispatched by Kenyatta found that there was a significant difference between the tariffs charged by the main power producer KenGen and IPPs.

By Zintle Nkohla 

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