Kenya Power eyes Treasury’s Kshs. 10B package to shield revenue loss

Kenya Power is banking on the Kshs. 10 billion bailout package from National Treasury to cushion it from revenue losses occasioned by the reduction in electricity tariff.

Kenya Power acting Chief Executive Officer Rosemary Odour says the bailout will further mitigate the deficit that may arise with the implementation of the second phase of a 15% reduction in power tariff.

The power distributor is in the process of managing system losses and cutting management costs to improve efficiency.

In January this year, the government implemented the first 15% reduction in power tariffs in an attempt to control the spiraling cost of living.

The review which was undertaken by the Energy and Petroleum Regulatory Authority 9EPRA) saw industries and manufacturers get a reduction of 17.6%.

Consumers under the domestic lifeline who use up to 100 units of power per month saw a reduction of 15.7% with per unit cost dropping to Kshs. 16 from Kshs. 19.

The utility says the power tariff reduction initiatives have shrunk its revenue margins where now it’s banking on a Kshs. 10 billion supplementary budget which is awaiting parliamentary approval to plug the deficit.

During the six months to December 2021, Kenya Power’s revenue went up 21.1% to Kshs. 83.5 billion in the period as operating costs dropped by 5.44% or by Kshs. 1 billion to Kshs. 19 billion in the period.

Kenya Power acting CEO Rosemary Odour revealed that talks with independent power producers are ongoing in a bid to review the current cost of the power purchased and the terms of the existing Power Purchase Agreements, (PPAs).

The electricity distributor has continued to roll out a proactive turnaround strategy to increase electricity sales, cut costs and reduce system losses.

Kenya Power’s net profit for the six months to December grew 21% to Kshs. 3.81 billion from Kshs. 138 million in the January to June period in 2020.