This archive report was first published on 13 July 2021.
Kenya Power and Lighting Company Plc is facing a taxman's ultimatum: 'pay up, or we auction your transformers.' The Kenya Revenue Authority has given the company 30 days to clear the transformers that were shipped into the country seven years ago.
The taxman's action is linked to delays by Kenya Power in clearing taxes for the import of the transformers and storage fees. This is just one of the many disputes between state agencies in Kenya, which often work at cross-purposes.
Meanwhile, a Danish energy giant, AP Moller, has received approval from the Common Market for Eastern and Southern Africa (Comesa) Competition Commission to acquire a Thika-based thermal electricity generating plant. This is the second such acquisition by AP Moller, which acquired a 52.5MW plant in Nairobi in 2020.
The Thika Power Plant has a generating capacity of 87 megawatts (MW) and a power purchase agreement (PPA) running to 2034. AP Moller is acquiring the plant through its Africa Investment Fund (AIF) Holdings, which owns the Comesa-approved plant in Nairobi.
AP Moller's acquisition of the Thika Power Plant has raised concerns about the high cost of power in Kenya. The plants use heavy fuel oil to produce power, which has been blamed for the high cost of power in the past.
President Uhuru Kenyatta had directed state agencies to use lawyers from the Attorney General's office and withdraw cases filed against each other. However, it seems that the directive fell on deaf ears.
Instead of working together, state agencies like the Kenya Revenue Authority and Kenya Power are engaged in an ugly fight. The KRA's action has slowed down the development of the country's electricity distribution infrastructure, leading to lost opportunities for generation of taxable income.
It is time for state agencies to work together and not at each other's expense. Creating bridges across silos, improving communication between departments, and ensuring that they are working efficiently toward the same goals is crucial for improving the quality of life for citizens.
