Bright side of slowing power tariff cuts investments in power sector
Click here to read full article from source
Nairobi, Jan. 25 -- The de-escalation, by the current Government, of the power tariff reductions that were effected in January 2022, while extremely unpopular, could be positive for future private sector investments in the energy sector.
Private sector investments in the energy sector are underpinned by Power Purchase Agreements (PPAs), which, by definition, are the primary contract between an "offtaker" (often a state-owned electricity utility, in jurisdictions where the power sector is largely state operated such as Kenya) and a privately-owned power producer.
In PPAs, the wholesale offtake tariffs are typically set with a view of long-term revenue generation and most PPAs are for around 20 years.
Essentially, investors in energy pro...
To read the full article or to get the complete feed from this publication, please Contact Us