Mumias Sugar Factory. [Photo/the-star.co.ke]
Mumias Sugar Company will resume supplying electricity to Kenya Power after a three-year absence.
The absence was triggered by a dispute over the power purchase agreement (PPA).
According to Mumias Sugar Chief executive officer Nashion Aseka, the two firms have revised the terms of engagement and scrapped some of the punitive clauses that saw Mumias slapped with huge fines for failure to supply to the national grid.
Under the new terms, Mumias will only be paid for power generated and sold to the grid.
“We have now agreed the new terms and we shall be selling extra electricity to Kenya Power in the coming few weeks,” said Mr Aseka.
“There will be no issue of penalties anymore,” he added. Mumias cogeneration plant has a capacity of 36 megawatts and intends to export 10 to 15 megawatts and use 12 megawatts internally.
In the deal, Mumias will not provide all the 36 megawatts for lack of enough bagasse, which is the main raw material for production of electricity. Cane supply remains low.
Mumias will be selling to Kenya Power at six US cents (Sh7) per kilowatt-hour, but the firm says it is still negotiating for an increase.
At Sh7 per unit, Mumias power is in the same tariff range as geothermal, and three times cheaper than diesel generated electricity.