Kenya Power, the electricity distributor company is back to profitability according to its parent Ministry.
Chief Administrative Secretary (CAS) in the Ministry of Energy Zachary Ayieko says the company will post a profit for the year ended June 2021 on the back of concerted efforts to improve its operations.
“We are going to make a profit and the turnaround results can now be seen. We hope this performance can be sustained. What we are noting now is that the company is turning around. Quite a number of things are changing. There is improved focus by management.” Zachary Ayieko Chief Administrative Secretary (CAS) in the Ministry of Energy
Kenya Power suffered Kes 15.99 billion worth of system losses beyond what it is allowed to recover from consumers in the year ended June 2020, shining a spotlight on the burden of the expanded network and customer base on the utility’s revenue.
Its total debt as at end of last June stood at Kes 118.73 billion, made up of Kes 65.96 billion commercial debt and Kes 53.26 billion on-lent debt. About kes 51.02 billion of the commercial loans are dollar-denominated, making the level of repayment costs susceptible to currency fluctuations.
Kenya Power said the high system losses are due to technical and commercial factors arising from the expanded transmission and distribution network as well as increased electricity pilferages. Technical losses occur when electrical energy is dissipated in the process of transmission and distribution while commercial losses are mainly attributed to pilferages, faulty meters and meter tampering.
Kenya Power said it hopes to cut its system losses to 19.9 per cent by 2025, riding on a raft of measures such as riding on technology to curb electricity theft and reduce technical losses
While the CAS did not break down the company’s numbers for the year, he credited concerted efforts by management and interventions by the Ministry of Energy for the bounce back.
This includes recent plans to restructure expensive commercial loans and an ongoing review of Kenya Power Independent Power Purchase Agreements (IPPs). The utility company was forced to make heavy provisions in the year while its financing costs continued to grow unabated.
However, while the Ministry has painted a rosy picture of the State Corporation, the board of Kenya Power has recently come under fire and is currently the subject of a probe by the Ethics and Anti Corruption Commission (EACC) over alleged graft.
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