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Kenya Power and Lighting Company has been ordered to disclose the identities of 17 business partners who made a total of Sh50.2 billion from the company in the financial year ending June 2020.
The National Assembly Public Investments Committee (PIC) questioned Kenya Power managing director Bernard Ngugi on Tuesday seeking clarification on its Sh82.1 billion purchases cost.
The investigation uncovered 17 Power Purchase Agreements (PPAs) signed with various firms transacting business with the power distributor.
Led by PIC Chair Abdullswamad Sherrif Nasir, the MPs disclosed that they did not understand why the PPA partners were making so much money out of Kenya Power.
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"I don’t understand. If... Lake Turkana windmill project, Kenya's hydro projects... energy is being produced, why do you still have to pay whether you consume it or not?" the Chairperson asked.
Tinderet MP Julius Melly added: "Before you have these agreements signed, there is always a government legal adviser and an officer from the audit office, do you have these agreements deposited with you or have you ever seen some of these agreements?"
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Kenya Power’s Managing Director & CEO, Bernard Ngugi
Confidentiality agreements
Responding to the MPs, CEO Ngugi elaborated that the process of signing PPAs is largely left to the discretion of the lighting company.
He added that the charges levied by the partnering firms are necessary as a measure of return-on-investment for Kenya Power.
"The AG is not involved in the PPAs (Power Purchase Agreements) but there is a process of initiation up to the point of signing a PPA…where the AG is involved is at the point of advising or giving a legal opinion on the letter of support," the Kenya Power CEO responded.
On the matter of disclosing the firms which have standing PPAs with Kenya Power, CEO Ngugi cited non-disclosure clauses in the PPAs which protect the identities of the owners of the 17 firms.
"Power Purchase Agreements have contractual provisions which would require more time to obtain consent and authorization from court processes because of confidentiality clauses such as Non Disclosure Agreements,," he stated.
The Mvita MP gave Kenya Power until close of business on Wednesday to have submitted the identities of the owners behind the 17 firms.