Powering Up

Increased connectivity, population growth and a rapidly shifting mix of power generation means that Kenya will be a fertile landscape for businesses and investors in the energy sector for the foreseeable future, says Kamau.

“A growing population means a growing demand for more power, and this creates more opportunities for different players in the energy sector,” she explained. “It also creates opportunities for transaction advisors, and for financiers of different power projects.”

Beyond Kenya’s growing population, the government’s goal of creating accessibility to power by reaching 100% electrification by 2030 will add to the escalating energy demand. Over the past decade, connectivity has grown from about 30% to nearly 75%.

“We have around eight years to accomplish that goal, and the government is willing to receive new players in the sector who are able to provide affordable and reliable tariffs for the people of Kenya,” said Kamau. “There’s also an opportunity for those in the technology sector to come up with new and innovative power technologies.”

Kamau noted that the Kenyan government is particularly trying to encourage investment in solar power production, among a general push for renewable energy.

“There’s been a great shift from non-renewable use to renewable energy sources,” Kamau commented. “At the moment hydro power production is at about 52% in Kenya, with fossil fuels taking about 32%. Renewable energy hasn’t quite penetrated the rural areas, but it’s encouraging to see a remarkable shift from non-renewables to renewable energy in Kenya.”

The power sector has been one of the key drivers of the economy in Kenya. Additionally, with Kenya being one of the most robust economies in sub-Saharan Africa, the Kenyan government has been at the forefront of ensuring that renewable energy takes precedence in the energy sector.

Kamau explained that public-private partnerships and licencing of independent power producers have aided the growth of the power sector. Independent power producers have particularly been in the game since the 1990s to complement public sector power generation.

She said that the Ashitiva team has “been quite active” in helping facilitate the development of the Kenyan energy sector in a number of ways. These include advising the government, drafting regulations and local guidelines, making key recommendations to the Power Purchase Agreement Taskforce appointed by His Excellency the President in 2021, representing several independent power producers, and training government officials on environmental health and safety requirements in the energy sector.

“Our energy department was commissioned by the Ministry of Energy to draft upstream regulations for the petroleum sector after the new Energy Act came into place in 2019,” she said. “It has a forward-looking perspective in terms of encouraging renewable energy production.”

Lately, Kamau has also been busy advising an independent power producer creating a hydro plant in Western Kenya. “We’ve worked with the client from the minute they got approval from the Ministry of Energy to commence the project.”

Issues range across a wide spectrum, from commercial implications for investors to negotiating power purchase agreements between the client and the government.

“We’ve had the advantage of representing both sides,” Kamau emphasised. “We are able to understand the perspective of the government and also the perspective of the private party, and so we are able to advise effectively, regardless of which side we are seated.”

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