Foreign power firms reap Sh6.2bn

• KPLC declines to reveal local directors of private producers in windfall business

More than 50 per cent of the money Kenyans pay for electricity goes to foreigners and politically-correct individuals, the Sunday Nation has established.

Interviews with top officials in the energy sector revealed that Independent Power Producers (IPPs) and Emergency Power Producers (EPPs) – all owned by foreigners – have in the past eight months reaped Sh6.2 billion from Kenya.

And Kenyans will have to brace themselves for high electricity bills for the next two years.

However, the bills will come down significantly when the country starts generating more geothermal power.

The managing director of the Kenya Electricity Generating Company (KenGen), Mr Eddy Njoroge, told the Sunday Nation that geothermal power would bring down electricity charges by about 50 per cent.

The four firms that supply thermal power (generated using diesel) to Kenya Power and Lighting Company (KPLC) are all foreign-owned with unknown local directors.

The four companies include Iberafrica, OrPower 4 Incorporated, Tsavo Power Company and Aggreko.

While 20 per cent of Iberafrica is owned by KPLC’s pension scheme, the company is Spanish-owned through First Independent Power Kenya Consultants (FIPCK). Iberafrica is a subsidiary of a Spanish firm, Union Fenosa.

Orpower 4 Incorporated is registered at Cayman Islands and, according to the Public Investments Committee report, the company’s local directors are not known.

“But senior partners at Kaplan and Stratton, Samuel Wainaina and Ms Lin Auster, negotiated for the company when it commenced business in Kenya,” the PIC report states.

Another company, Tsavo Power Company Limited, is also a British firm but its local directors are not known.

Aggreko, which the government contracted last August to provide emergency power after the country was hit by a serious drought that led to the rationing of power, is also British-owned.

Efforts to establish the local directors of the firm hit a dead end as KPLC declined to reveal their identity.

“That question is best answered by the IPPs,” KPLC managing director Joseph Njoroge replied.

The KPLC boss was, however, quick to state that the foreign firms were responsible for high electricity bills because they were the only firms that could supply power to Kenyans.

“During the recent drought, power sold to KPLC from the cheaper hydro sources reduced to about 30 per cent and KPLC resorted to buying the more expensive thermal power from Independent Power Producers and Emergency Power Producers which increased the thermal percentage to 53 per cent,” Mr Njoroge said.

The contracts for Iberafrica and Orpower 4 Inc were signed when Mr Samuel Gichuru was the managing director of KPLC.

Another IPP which was retired in 2005, Westmont (K) Limited, was Malaysian owned.