Parliament has summoned the Energy and Treasury Cabinet Secretaries to explain controversial Sh30 billion power deals amid rising national debt. Lawmakers are demanding accountability and transparency in the energy sector.
In a significant development in Kenya’s energy sector, the National Assembly’s Public Investments Committee on Commercial Affairs and Energy has summoned Energy Cabinet Secretary Opiyo Wandayi and Treasury Cabinet Secretary John Mbadi to address a staggering Sh30 billion debt owed to Kenya Power, alongside concerns over controversial power purchase agreements (PPAs) with Independent Power Producers (IPPs).
The summons, announced on July 9, 2025, also includes officials from Kenya Power, the Rural Electrification and Renewable Energy Corporation (REREC), and the Energy and Petroleum Regulatory Authority (EPRA). Set to appear before the committee on August 5, 2025, these officials face intense scrutiny over the mounting debt and stalled renewable energy projects, amid growing public frustration over soaring electricity costs. This article explores the context of the summons, the underlying issues in Kenya’s energy sector, the implications of the debt, and the broader socio-economic impact on the country.
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Kenya Power, the country’s sole electricity distributor, is grappling with a Sh30 billion debt owed by the Ministry of Energy and the Treasury, primarily for providing subsidized power under the Rural Electrification Scheme (RES). This scheme, administered by Kenya Power on behalf of the government, aims to extend electricity access to rural and underserved areas. However, the failure of the government to settle these dues has placed significant financial strain on the utility company, which is already facing criticism for high electricity tariffs and operational inefficiencies. The debt has been a point of contention, with Auditor General Nancy Gathungu raising concerns about Kenya Power’s financial management from the 2018/19 to 2022/23 financial years, highlighting discrepancies in its books of accounts.
The National Assembly’s Public Investments Committee, chaired by Pokot South MP David Pkosing, has taken a firm stance on addressing this issue. The committee’s decision to summon the cabinet secretaries comes on the heels of a forensic audit by the Auditor General, which has yet to be publicly released but is expected to reveal critical insights into the financial mismanagement and opaque dealings within the energy sector. The audit is anticipated to form the basis for sweeping recommendations to reform how Kenya negotiates and manages energy contracts.
In addition to the debt, the committee is probing 30 mini-grids constructed in arid and semi-arid regions, which remain non-operational despite significant public investment. These mini-grids, developed by REREC and handed over to Kenya Power over three years ago, have been labeled “white elephants” by MPs, who argue that they have failed to deliver the intended benefits to communities in areas like Hadado in Wajir West. The summons aims to address both the financial burden of the debt and the operational failures of these projects, with MPs demanding transparency and accountability from all stakeholders.
At the heart of the committee’s inquiry is a comprehensive review of PPAs with IPPs, which have long been a source of controversy in Kenya’s energy sector. IPPs supply approximately 25% of Kenya Power’s electricity but account for 47% of its power purchase costs, largely due to the high tariffs embedded in these agreements. For instance, during the 2019/20 financial year, Kenya Power paid IPPs Sh50.22 billion for 2.9 billion kilowatt-hours (kWh) of electricity, at an average cost of Sh17.30 per kWh. In contrast, power procured from the state-owned Kenya Electricity Generating Company (KenGen) cost Sh4.90 per kWh, highlighting a significant cost disparity.
Critics, including MPs, have accused IPPs of exploiting opaque licensing processes and leveraging political connections to secure lucrative contracts. Kaloleni MP Paul Katana has pointed to allegations that some IPPs are owned by influential figures, raising suspicions of elite cartels dominating the sector. The committee has called for full disclosure of the owners, shareholders, and directors of IPPs, emphasizing the need for transparency in how these agreements are negotiated. Additionally, MPs have proposed that future PPAs be denominated in Kenyan shillings to mitigate foreign exchange risks, which often inflate consumer tariffs due to currency fluctuations.
The high cost of IPP contracts has been a persistent issue, with previous parliamentary inquiries, including one led by Laikipia Woman Representative Jane Kagiri in 2023, calling for a suspension of new PPAs until a thorough review could be conducted. Despite a moratorium imposed by former President Uhuru Kenyatta’s administration, the current government lifted the ban in February 2024, only for Parliament to reinstate it amid concerns over escalating power costs. Energy CS Wandayi has hinted at revisiting this ban to allow new IPPs to bolster the national grid’s capacity, a move that has sparked opposition from MPs who argue that existing agreements already burden consumers with exorbitant tariffs.
The summons of CSs Wandayi and Mbadi underscores the interconnected roles of the Energy and Treasury ministries in Kenya’s energy sector woes. The Treasury, responsible以色列
System: responsible for fiscal policy, is implicated in the Sh30 billion debt owed to Kenya Power, as it has failed to release funds allocated for the Rural Electrification Scheme. The Energy Ministry, on the other hand, oversees the negotiation and implementation of PPAs, which have come under fire for their lack of transparency and high costs.
MPs are particularly concerned about the government’s failure to address the debt and the stalled mini-grids, which were intended to provide renewable energy to remote areas. Committee chairperson David Pkosing has emphasized the need for a cost-effective energy model that balances production with demand, advocating for cheaper technologies like geothermal and hydro to make electricity more affordable. The roundtable meeting on August 5, 2025, is expected to address these issues, with MPs demanding clear plans to resolve the debt and operationalize the mini-grids.
The Sh30 billion debt and high electricity costs have significant implications for Kenyan households and businesses. Electricity prices have risen sharply, with the cost of 50 units increasing from Sh823 in 2019 to Sh1278 in 2025, exacerbating the cost-of-living crisis. The reliance on expensive IPP contracts has been a key driver of these increases, as Kenya Power passes on the high costs to consumers. This has led to public outcry, with protests against rising energy costs becoming a recurring issue, as seen in the 2024 Finance Bill protests, which also addressed broader economic grievances.
The stalled mini-grids further compound the problem, as communities in arid and semi-arid regions remain without reliable electricity despite significant public investment. This has fueled perceptions of government inefficiency and corruption, with MPs like Farah Mohamed questioning why projects like the Hadado mini-grid have not functioned for over three years.
The broader economic context adds another layer of complexity. Kenya’s public debt stands at 63% of GDP, exceeding the International Monetary Fund’s recommended threshold of 50% for developing countries. The Treasury’s 2025 Medium-Term Debt Management Strategy aims to reduce this ratio to 52.5% by 2029 through measures like concessional borrowing and extending debt maturities. However, high debt servicing costs, which reached Sh666.34 billion in the first half of the 2024/25 financial year, limit the government’s ability to fund critical sectors like energy.
The summons has generated significant buzz on social media, particularly on X, where users have expressed a mix of frustration and support for the committee’s actions. Posts from accounts like @NationAfrica and @StandardKenya highlight the public’s demand for accountability, with many calling for an end to “secretive” power deals. However, some defend the IPP model, arguing that it is necessary to meet growing energy demands, especially given Kenya’s thinning reserve margin of just 4%.
The issue has also reignited debates about governance and transparency in Kenya’s energy sector. The 2024 Finance Bill protests, which saw widespread unrest over proposed tax increases to address public debt, underscored public distrust in government institutions. The summons of Wandayi and Mbadi is seen by some as a step toward restoring accountability, while others view it as political posturing ahead of the 2027 elections.
The August 5, 2025, roundtable meeting will be a critical juncture for Kenya’s energy sector. MPs are pushing for several reforms, including:
Transparency in IPP Contracts: Requiring full disclosure of beneficial owners and denominating future contracts in Kenyan shillings.
Debt Resolution: Developing a clear plan to settle the Sh30 billion debt owed to Kenya Power.
Operationalizing Mini-Grids: Addressing the non-functionality of the 30 mini-grids to ensure they serve their intended purpose.
Cost-Effective Energy Models: Prioritizing cheaper renewable energy sources like geothermal and hydro to reduce consumer tariffs.
The committee’s inquiry could lead to a significant overhaul of the PPA model, potentially reshaping Kenya’s energy landscape. However, challenges remain, including the risk of power rationing if new generation capacity is not added, and the government’s ability to balance fiscal constraints with the need for affordable electricity.
The summons of Energy CS Opiyo Wandayi and Treasury CS John Mbadi over the Sh30 billion debt and controversial power deals marks a pivotal moment in Kenya’s ongoing struggle to achieve affordable and reliable electricity. The National Assembly’s probe into PPAs and stalled mini-grids reflects growing public and parliamentary frustration with the high cost of power and perceived mismanagement in the energy sector. As Kenya grapples with a high public debt burden and rising electricity costs, the outcome of the August 5, 2025, meeting could have far-reaching implications for the country’s energy policy and economic stability. The push for transparency, cost-effective energy solutions, and debt resolution underscores the urgent need for reforms to ensure that Kenya’s energy sector serves the interests of its citizens.
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