Kenya Power bets on Ksh. 10 billion national treasury rescue plan to cushion it from the loss of income caused by the reduction in electricity tariffs.
Kenya Power’s acting chief executive, Rosemary Odor, said the bailout will further mitigate the shortfall that may arise with the implementation of the second phase of a 15 per cent reduction in the electricity tariff.
The power distributor is managing system losses and reducing management costs to improve efficiency.
In January this year, the government implemented the first 15% cut in electricity tariffs in a bid to control the soaring cost of living.
The review which was undertaken by the Petroleum and Energy Regulatory Authority (9EPRA) saw industries and manufacturers achieve a reduction of 17.6%.
Consumers under the household lifeline who use up to 100 units of electricity per month saw a reduction of 15.7% with unit cost falling to Kshs. 16 Ksh. 19.
The utility says power rate reduction initiatives have squeezed its revenue margins as it now bets on Kshs. 10 billion additional budget awaiting parliamentary approval to make up the shortfall.
In the six months to December 2021, Kenya Power’s revenue grew by 21.1% to Kshs. 83.5 billion over the period as operating costs fell by 5.44% or Kshs. 1 billion to Kshs. 19 billion over the period.
Acting CEO of Kenya Power, Rosemary Odor, has revealed that talks with independent power producers are underway in a bid to review the current cost of purchased power and the terms of power purchase agreements (PPA).
The electricity distributor continued to implement a proactive recovery strategy to increase electricity sales, reduce costs and reduce system losses.
Kenya Power’s net profit for the six months to December rose 21% to Kshs. Kshs 3.81 billion. 138 million over the period from January to June in 2020.