Electricity (Development of Small Power Projects)(Amendment) Rules 2025

On 31 October 2025, the Government published the Electricity (Development of Small Power Projects) (Amendment) Rules 2025 (SPP Rules 2025). These amendments revise and complement the Electricity (Development of Small Power Projects) Rules 2020, introducing new definitions, modifying obligations for Small Power Producers (SPPs), Very Small Power Producers (VSPPs), and Distribution Network Operators (DNOs), and updating regulatory procedures.

Key Amendments to Definitions (Rule 3)

• Avoided Cost
  • Redefined to reflect the incremental cost differences saved by DNOs when purchasing electricity compared to generating it themselves.
  • Previously limited to the cost incurred by the DNO for self-generation or sourcing power from another supplier.
• Eligible Customer
  • Now refers to a person authorised by EWURA to contract directly with a licensed generator.
  • Previously, the definition focused on contracting with a licensed supplier.
• Small Power Producer
  • Capacity range maintained at 100 kW – 10 MW.
  • Introduces:
    • 25% fossil fuel cap for hybrid systems.
    • Permission for installed capacity above 10 MW, provided export at the interconnection point does not exceed 10 MW.
• Small Power Project Developer
  • Similar to SPP definition but does not permit installation above 10 MW with restricted export.
• New Requirements for SPPs and DNOs (Rule 4)
  • SPPs must now offer additional commercial and technical benefits to DNOs, subject to EWURA approval.
  • SPP development restricted to areas declared to be of strategic nature.
  • DNOs mandated to publish the list of strategic areas every July in widely circulated newspapers.
• Removal of the previous exemption:
  • All VSPP projects regardless of development stage must comply with Rule 4.
• Mini-grid developers must obtain Rural Energy Agency (REA) endorsement when applying to the Ministry for VSPP status.
• Deletion of Rule 6
  • Rule 6 has been deleted in full.
  • Its removal eliminates the obligation for VSPP developers to submit quarterly progress reports.
• Amendments to Rules 7 and 11
  • A project developer aggrieved by a DNO decision may now refer the matter directly to EWURA for determination, instead of filing an appeal.
• Amendments to Rule 35
  • SPP developers and DNOs must sign the Standardised Power Purchase Agreement (PPA) without substantive amendments.
• EWURA may issue standardised addenda addressing:
  • Emerging technologies
  • Project-specific technical or operational considerations
  • Parties may adopt any EWURA standardised addendum as part of the PPA.
• Previous Third Schedule (Standardised PPA for purchase of electric energy) has been deleted.
• Amendment to Rule 36
  • Removal of the reference to the year “2019” clarifies that licensing must comply with the current Electricity (Generation, Transmission and Distribution Activities) Rules, not limited to the 2019 version.
• Amendment to Rule 58
  • SPP developers are now required to sign a Performance Agreement with EWURA.
• New Second Schedule
  • Previous Second Schedule re Letter of intent Form has been deleted.
• New Letter of Intent Application Form has been introduced.

Conclusion

The 2025 amendments introduce enhanced regulatory clarity, updated technical requirements, and strengthened oversight for SPP and VSPP development. Developers and operators should carefully review these changes and adjust their project development plans, compliance processes, and engagement strategies with DNOs and EWURA.

Please contact VELMA Law if you have any comments or questions.