MINISTRY OF ENERGY AND PETROLEUM

Background

Energy is one of the key enablers of the Vision 2030 and energy security remains a matter of national national priority. The Second Medium Plan 2013-2017 identifies energy as one of the enablers for transformation into “a newly-industrializing, middle-income country providing a high quality of life to all its citizens in a clean and secure environment”. Access to competitive-priced, reliable, quality, safe and sustainable energy is essential for achievement of the Kenya Vision 2030.

Under the fourth Schedule of the Constitution of Kenya 2010, the Ministry of Energy and Petroleum, on behalf of the National Government, is responsible for energy policy and regulation of electricity and gas reticulation while County Governments are responsible for planning and development of electricity and gas reticulation and regulation.

Mission

To facilitate provision of clean, sustainable, affordable, reliable, and secure energy services for national development while protecting the environment.

Vision

Affordable, Quality Energy for all Kenyans.

Mandate

The Ministry of Energy and Petroleum’s functions as detailed in the Executive Order No. 1/2016 of May 2016 on the Organisation of the Government of the Republic of Kenya are:-
• Energy Policy and Development.
• Hydro power Development.
• Geothermal Exploration and Development.
• Thermal Power Development.
• Oil and Gas Exploration.
• Oil/Gas and Minerals sector capacity development.
• Rural Electrification Programme.
• Petroleum products, import/export/marketing policy Management.
• Renewable Energy Promotion and Development
• Energy Regulation, Security and Conservation.
• Fossil Fuels Exploration and Development.

Institutional Structure

The institutional structure of the energy sub sector comprises of the Ministry of Energy and Petroleum and its Semi-Autonomous Government Agencies (SAGAs) as shown below:

The Ministry of Energy and Petroleum (MoEP)

MoEP is in charge of policies to create an enabling environment for efficient operation and growth of the sector. It sets the strategic direction for the growth of the sector and provides a long term vision for all sector players. The Ministry is divided into two State Departments namely:

The State Department of Energy
The State Department of Energy is mandated to undertake the following functions:

  • National Energy and Policy management
  • Hydro-power Development
  • Geothermal Exploration and Development
  • Rural Electrification Programme
  • Promotion of Renewable Energy
  • Energy Regulation, Security, and Conservation
  • State Department of Petroleum
  • Strategic Petroleum Management
  • Management of Upstream Petroleum Products and Marketing
  • Oil and Gas Sector Capacity Development
  • Petroleum Products, Imports, Exports and Parketing Polict Management
  • Licensing of Petroleum Marketing and Handling
  • Quality Control of Petroleum Products

Semi-Autonomous Agencies in the State Department of Energy

The Energy Regulatory Commission (ERC)
ERC is an independent agency responsible for regulation of the energy sector agencies, oversight, coordination preparation of Least Cost Power Development Plans (LCPDP), and monitoring and enforcement of sector regulations.

The Energy Tribunal
The Energy Tribunal is an independent legal entity that arbitrates disputes between parties in the sector.

The Kenya Power and Lighting Company (KPLC)
KPLC limited is the power off-taker from power generators on the basis of negotiated Power Purchase Agreements for transmission, distribution and supply to consumers. KPLC is a limited liability company, listed on Nairobi Stock Securities Exchange, with Government’s shareholding of 51% while the rest is privately owned.

The Kenya Electricity Generating Company (KenGen)
KenGen is the main player in electricity generation accounting for 1,238MW (76%) of installed electricity generation capacity for the national transmission grid as at 30th June 2013. It is a limited liability company listed in Nairobi Stocks Securities Exchange, with Government shareholding of 70% while the rest is privately owned.

Rural Electrification Authority (REA)
REA is a government wholly owned entity, charged with implementing the Rural Electrification Programme. It came into operation in July 2007.

Geothermal Development Company (GDC)
GDC is a fully owned Government Special Purpose Vehicle (SPV) that undertakes surface exploration of geothermal fields, explorations, appraisals, drilling, steam production and entering into steam sales agreements with investors in the geothermal electricity generation.

Kenya Electricity Transmission Company (KETRACO)
KETRACO was incorporated in December 2008, is a fully owned State Corporation and a Special Purpose Vehicle to plan, design, construct, own, operate and maintain new high voltage (132kV and above)electricity transmission grid and regional inter-connectors.

l. Kenya Nuclear Electricity Board (KNEB)

KNEB is charged with spearheading and fast tracking development of nuclear electricity generation to enhance production of affordable and reliable electricity.

m. Independent Power Producers (IPPs)

IPPS are private investors in the power sector involved in generation either on a large scale or for the development of renewable energy under the Feed-in–Tariff (FiT) Policy.

The State Department of Petroleum

Semi-Autonomous Agencies Under the State Department of Petroleum

Kenya Pipeline Company (KPC)
KPC was established in September 1973 under the Companies Act Cap 486, is 100% owned by the government which and its mandate is to provide effective, reliable, safe and cost effective means of transporting petroleum products from Mombasa to the hinterland. The Company commenced operations in 1978 and has constructed a 1200kilometre Pipeline network and over 600 million-litre storage and loading facilities for transport, storage and distribution of oil products.

National Oil Corporation of Kenya (NOCK)
NOCK is 100% state-owned corporation established in 1981 and became operational in 1984. It mandate is oil exploration, importation and sale of petroleum products in order to provide stability in the market.

Directorates and Functions

The Ministry has five Directorates namely:

1. Electrical Power

The Directorate is charged with:-

i. Energy Policy and Development;

ii. Hydro Power;

iii. Thermal Power Development;

iv. Rural Electrification Programme; and

v. Energy Regulation, Security and Conservation.

2. Renewable Energy Directorate

The Directorate is charged with:

  1. Renewable energy, energy efficiency and conservation policy formulation and review
  1. Renewable energy, energy conservation and conservation, promotion and Development
  1. Renewable energy, energy efficiency and conservation planning
  2. Integration of climate change and gender in renewable energy and energy efficiency and conservation policies
  3. Feed-in-Tariff policy formulation and review
  4. Monitoring, supervision and evaluation of renewable energy, energy efficiency and conservation projects
  5. Development of technical and energy performance standards, energy rating labels and regulations in collaboration with Kenya Bureau of Standards and other statutory organizations
  6. Collaboration with the East African Community Partner States in harmonization of renewable energy policies and standards
  7. Feasibility studies on renewable energy, energy efficiency and conservation projects
  8. Mobilization of funding for renewable energy, energy efficiency and conservation projects.
  1. Geo-Exploration Directorate

The Directorate is charged with:

  1. Formulation of policy, fiscal, legal and regulatory framework for exploration and production of geo-energy resources
  2. Undertaking geological, geophysical and geo-chemical mapping for Geo-Energy Minerals
  3. Acquisition, analysis of and interpretation of exploration information on geo-energy minerals
  4. Coordination of exploratory drilling operations in prospective areas
  5. Evaluation of Geo-energy resource prospects
  6. Promotion and licensing of acreage for Geo-energy minerals
  7. Monitoring and evaluation of development and production of Geo-energy mineral resources
  8. Facilitating and coordinating Nuclear Energy Project Board
  9. Negotiation and licensing for geo-thermal, and solid Geo-Energy mineral exploration and production
  10. Ensuring compliance to all legal requirements by customers exploiting Geo-Energy resources
  11. Negotiating Agreements/Contracts with Independent Power Producers, Special Purpose Vehicle
  12. Monitoring of licensed companies
  13. Facilitation of Compensation and Resettlement of the affected community.

4. Commissioner of Petroleum

The Directorate is based under the State Department of Petroleum and is charged with:

  1. Development and review of policies, legal, regulatory and contractual framework for spearheading upstream and downstream petroleum operations
  2. Overall coordination of upstream and downstream Petroleum operations
  3. Negotiation and regulation of Production Sharing Contracts
  4. Advising on change of administration in active Production Sharing Contracts
  5. Capacity development in the areas of Petroleum Geo-sciences, Petroleum Engineering, Petroleum Economics, Petroleum Accounting, Petroleum Resource Appraisal and Management, Procurement Techniques
  6. Enforcement of Environmental Protection and Management regulations in liaison with NEMA
  7. Ensuring buildup of local content capacity in line with national policy goals
  8. Development of an oil and gas master plan for exploration development, production and marketing of the produced oil and gas
  9. Developing modalities and strategies for licensing of blocks in bid rounds and custodian of all signed Production Sharing Contracts.

5. Administrative Services

Administrative Services for the Ministry of Energy and Petroleum are offered by the following divisions:

  1. Administration
  2. Human Resource Management
  3. Finance
  4. Accounting Services
  5. Supply Chain Management
  6. Internal Audit and Risk Management
  7. Central Planning and Project Management
  8. Public Relations and Communications
  9. Legal Services
  10. Information, Communication and Technology