Nairobi Senator Edwin Sifuna has introduced a bill in the Senate that aims to increase transparency in Kenya’s energy sector by requiring disclosure of beneficial ownership in energy purchase agreements.
The Energy (Amendment) Bill 2023, if passed, will mandate generating companies to disclose full beneficial ownership before signing any agreements to sell electricity to state power company Kenya Power. It also requires purchasing entities to maintain a public register of all generating companies they contract with, including listed beneficial owners.
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“The rationale for disclosure of beneficial ownership information is to create an accurate public disclosure regime that provides transparency in the beneficial ownership and control structures of companies,” the bill states. This aids in “uncovering tax evasion schemes, money laundering practices, corruption schemes, and other illegal activity.”
Currently, Kenya Power can procure electricity from private generators through direct negotiations, which Sifuna’s bill says should be replaced by a competitive bidding process “to protect the end user of electricity from inflated electricity costs.”
The bill would give priority to generators using renewable technologies and those with a “sustainable base load at point of dispatch.”
Kenya has been plagued by high energy costs for years due in part to non-transparent procurement processes, passing extra costs on to consumers.
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“Access to affordable energy is important in achieving sustainable development goals in health, education and agriculture to improve living standards,” the bill’s memorandum states.
It argues that principles of public finance under the constitution, including openness, accountability and good governance, should apply to all energy purchase agreements.
The Energy and Petroleum Regulatory Authority would be barred from approving any agreements that fail to comply under the amendment.
The amendment bill will be debated in the Senate in coming weeks.
