Economy
IPPs to disclose beneficial owners before contracts in new proposal
Friday September 15 2023
Nairobi Senator Edwin Sifuna addressing journalists on June 18, 2023. FILE PHOTO | EVANS HABIL | NMG
Independent Power Producers (IPPs) seeking to sign purchase deals with the government will be forced to disclose their beneficial owners before inking contracts if MPs approve a Bill currently before the House.
The Energy (Amendment) Bill, 2023 sponsored by Nairobi Senator Edwin Sifuna seeks to improve transparency and curb sleaze in the multi-billion shilling power purchase deals between Kenya Power and IPPs.
Read: Registrar declines release of IPPs data
“An energy purchase agreement shall only be entered into with a generating entity which has disclosed and registered full beneficial ownership in accordance with the Companies Act,” reads the Bill.
According to the proposed law, Kenya Power which is the procuring entity, shall publish on its website an annual audit report of agreements entered into with power plants together with owners.
“A purchasing entity shall prepare and maintain a register of generating entities that have entered into energy purchase agreements with and the entity’s beneficial owners ownership and publish the names on its website and annual audit report,” reads the Bill.
The public shall within 90 days have a chance to see all information on the power purchasing agreements and owners of the firms.
The Bill says full disclosure will not only promote transparency but also curb money laundering and corruption. The Bill bars the government from approving any power purchasing deals with any entity that has not fully disclosed the information needed.
According to Mr Sifuna, the provision of the details of both the beneficial owners and the PPAs will promote transparency in the energy sector.
“This aids in not only promoting investor confidence and good corporate governance practices but also in uncovering tax evasion schemes, money laundering, corruption, and other illegal activity involving either one or more companies,” reads the Bill.
The new Bill by Sifuna also stipulates that before getting into any power purchasing agreement with any entity, the government will be compelled to conduct a feasibility study to ensure that the new power plant being procured will only plug in the deficit.
Read: IPPs push for renewal after expiry of 20-year contracts
“Prior to procurement of electrical power, conduct a feasibility study to identify whether there is enough demand for electricity purchase which cannot be met by the existing production,” reads the Bill.
