This archive report was first published on 24 June 2020.
On June 24, 2020, the Kenyan government announced plans to declare wholesale power supply contracts null and void due to the significant drop in electricity demand caused by the Covid-19 pandemic.
The Ministry of Energy cited the reduced demand as a result of the pandemic's impact on consumer behavior, with factories and hotels forced to close, leading to a 15.3 percent decrease in electricity consumption in April.
Energy Secretary Charles Keter explained that the ministry had resorted to declaring force majeure, a clause that excuses a company from contractual agreements when an extraordinary event beyond its control occurs.
However, power generators have expressed concerns that the declaration of force majeure could jeopardize their financial muscle and lead to unstable supply to both homes and businesses.
Legal experts have noted that the coronavirus pandemic likely qualifies as a force majeure event, but any company invoking it must provide proof of incapacity.
Kenya Power, the electricity distributor, has already issued its third profit warning in a row, citing reduced electricity consumption and rising costs of buying wholesale power.
