Having concluded in Part 1 of this two part series, that the power sector challenges are like a tangled ball of wool, allow us to pick some threads out and take a closer look at some of the pieces of the puzzle.
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Experience has included advising:
- The sponsors of a USD1.8 billion energy project on the development of a 100 MW wind power plant in Kajiado, Kenya
- Senior lenders on the development and construction of a 140 MW geothermal power plant and related facilities in the Rift Valley region in Kenya and the sale of capacity and energy to the Kenya Power and Lighting Company
- An international oil and gas exploration and development company on its rights under a production sharing contract with the Kenyan government for the acquisition of on-shore exploration blocks
- Government of Kenya in a multibillion investment arbitration proceedings filed by Cortec Mining Kenya Limited at the International Centre for Settlement of Investment Disputes (ICSID)
- The government of an East African country on its oil and gas operations
- The senior lenders on a 981 MW coal-fired power plant in Lamu County, Kenya
- An international company on a grant of concessions over coal mines in Kenya
- The receivers appointed in respect of the sale of wind turbine generators and other assets from a company
- The sponsors on the financing of two 40 MW solar power projects
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Having followed with great interest the ongoing debate on the power sector, fuelled by the thought-provoking articles written by Edward Njoroge and Jaindi Kisero recently, we would like to join the fray with some points to ponder.
Force Majeure was one of the biggest concepts up for discussion in 2020. In 2021, the term ‘corporate PPA’ is earning its pride of place as one of the new buzz words for the power and energy sectors in the region, with sector players critically looking at how these types of arrangements can be used to address some of the cost and supply challenges facing the region.
In November 2020, the Energy and Petroleum Regulatory Authority (EPRA) approved an increase in electricity tariffs for consumers. It is no secret that high costs of power coupled with occasional reliability issues have forced some of the large industrial consumers, who account for approximately 54.8 percent of Kenya Power’s sales revenues, back to the drawing board in a bid to find a sustainable, affordable and reliable solution for their energy needs.