The National Assembly has ordered a sweeping forensic investigation into Kenya Power (KPLC) and all Independent Power Producers (IPPs) amid mounting public outrage over the high cost of electricity. In a directive issued on Tuesday, November 18, 2025, Parliament instructed the Directorate of Criminal Investigations (DCI), the Ethics and Anti-Corruption Commission (EACC), and the Auditor-General to launch immediate, comprehensive probes into the entities. The investigations will scrutinize years of Power Purchase Agreements (PPAs), operational costs, and billing systems that have collectively contributed to making Kenya's electricity among the most expensive in the region.

The move follows a prolonged inquiry by the National Assembly's Departmental Committee on Energy, which identified significant disparities in the cost of power procured from state-owned KenGen versus private producers. According to a recent Auditor-General's report for the year ending June 30, 2024, IPPs supplied 41% of the total power to the grid but received 60% of the total payments from KPLC, amounting to KSh 73.7 billion. In contrast, KenGen supplied the majority (59%) of the electricity but was paid only KSh 49.4 billion, or 40% of the total expenditure.

Discrepancies in Power Tariffs

The price gap is stark across different energy sources. Data reveals that KPLC pays an average of KSh 21.16 per kilowatt-hour (kWh) for electricity from IPPs, more than double the KSh 9.78 per unit paid to KenGen. For geothermal power, a cornerstone of Kenya's renewable energy strategy, IPPs charged KSh 17.28 per unit, while KenGen's rate was KSh 8.24. The disparity was even more pronounced in thermal power generation, where IPPs billed as high as KSh 43.76 per unit, compared to KenGen's KSh 29.47.

These skewed contracts, some of which compel KPLC to pay for electricity whether it is consumed or not, have been blamed for the inflated power bills faced by Kenyan households and businesses. The parliamentary committee noted that these high costs act as a major disincentive for investment and negatively affect the country's economic competitiveness. The probe will also extend to former senior officials at the Ministry of Energy and Kenya Power, who were involved in the signing of these controversial agreements.

Focus on OrPower IV and Historical Agreements

Among the IPPs under scrutiny is OrPower IV Inc., which operates the Olkaria III geothermal complex. The company signed its initial PPA with KPLC in November 1998, with subsequent amendments over the years. These long-term agreements, often denominated in foreign currency, have exposed KPLC and, by extension, consumers to significant foreign exchange losses, which have reached KSh 23 billion. Attorney General Justin Muturi previously informed the energy committee that the State Law Office was not consulted when KPLC entered into these multi-billion shilling deals, raising questions about their legality and fairness.

The Auditor-General has also raised serious concerns about KPLC's billing system, revealing that up to 20% of charges in consumers' bills could not be matched to actual consumption. The audit found a lack of check meters in the majority of power generation plants, faulty meters, and discrepancies that lead to consumers being overcharged. These system losses, which have consistently been higher than the approved threshold, are passed on to consumers, further inflating the cost of electricity.

Calls for Reform and Transparency

The parliamentary investigation aims to bring transparency to the sector and potentially renegotiate or terminate the costly PPAs. The probe was initiated following a forensic audit by the Auditor General that flagged irregularities in the structure and beneficiaries of the IPP contracts, with some suspected links to politically connected individuals. The Public Investments Committee on Commercial Affairs and Energy, chaired by Pokot South MP David Pkosing, has been a vocal critic of the secretive nature of the PPAs. “Kenyans are paying far too much for electricity, and one of the biggest suspects are these IPPs and their secretive contracts,” Pkosing stated in July 2025.

In a related development, Parliament recently lifted a nearly three-year freeze on signing new PPAs to avert potential power shortages due to rising demand. However, new agreements will be subject to stricter conditions, including a price cap of seven US cents per kWh and mandatory review by the Attorney General. The government will also push for competitive bidding for new power projects to replace the opaque bilateral negotiations of the past. The outcome of the forensic audits is expected to provide a definitive roadmap for reforming Kenya's energy sector to ensure affordable and reliable power for all citizens.