AG’s office not involved in drawing up costly power purchase agreements – Muturi

The controversy surrounding the country’s high electricity cost took a new twist this week after Attorney-General Justin Muturi denied any knowledge of the power purchasing agreements signed between Kenya Power and the Independent Power Producers in the country.

Muturi, while appearing before the National Assembly’s committee on Energy, said that his office had not been notified or briefed on the deals signed between Kenya Power Company and the IPPs.

The said agreements have been singled out as one of the reasons why electricity prices in the country have risen consistently, with MPs, trade unionists, civil society groups and the public accusing the IPPs of exploiting Kenyans with expensive deals.

While making his submissions before the Energy Committee, Muturi pointed out that the agreements were signed without the input or advice of the Office of the Attorney General. 

He added that, as a result, his office was in the process of deliberating the implications of re-negotiating or terminating the contracts.

On the Mutual Legal Assistance on Beneficial Ownership, the AG indicated that for that to take effect, an active criminal matter must be in place.

“The issues raised here haven’t progressed to a level of investigation. However, the process involves DCI, DPP, EACC, AG’s office, and the Ministry of Foreign Affairs,” said Muturi.

The committee chaired by Mwala MP Vincent Musyoka had summoned Muturi as part of the ongoing investigations on the rising cost of electricity and a probe on the deals signed between Kenya power and IPPs.

The team had sought the AG’s advisory on the legal implications of terminating some of the Power Purchase Agreements and whether the government could take over some of the power plants to reduce the cost on the consumers.

During meetings with various stakeholders, the committee noted irregularity in Power Purchase Agreements.

“There is the amount that is paid for no generation at all, and they say it is some sort of insurance so that whenever we need power, the generators can be switched on,” said Musyoka.

The committee raised concerns over exploring the Mutual Legal Assistance principle in establishing beneficial owners of power companies registered in other countries.

“What options do we have to unearth the Directors of the companies hiding in other names of companies registered outside Kenya?” Musyoka asked.

In response, Muturi said his office will issue an advisory upon concluding the technical Committee’s task of reviewing and re-negotiating the PPAs.

The AG urged the committee to summon the Registrar of Companies to unmask the owners of the IPPs.

Further, he disclosed that it violates the applicable Law for the Registrar of Companies to claim he doesn’t have ownership information on IPPs.

“Section 994 (4) of the Companies Act states that the Registrar shall keep the Foreign Companies Register at such a place or places as are prescribed in its head office and shall ensure that it is kept for inspection by interested persons during normal business hours of the Register,” said Muturi.

To fast-track the ongoing inquiry, the AG urged the committee to request weekly updates from the technical team engaging IPPs on power re-negotiations.