Kenya Power Sinks Into A Ksh 1.1 Billion Loss

By Jane Muia / Published February 28, 2023 | 11:58 am

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Operating costs increased from 19.1 billion shillings to 21.7 billion shillings owing to increased foreign exchange losses arising from the revaluation of outstanding payments to power generators denominated in foreign currencies as a result of the depreciation of the shilling.

The Kenya Power and Lighting Company (KPLC) sunk into a 1.1 billion shillings net loss for the half year ended December, financial results announced on Monday indicate.

The loss was primarily attributed to a weak shilling and the 15 percent electricity tariff cut that was effected in January last year as a State directive.

“This drop is attributable to increased foreign exchange losses, and the implementation of the 15 percent reduction of the end user electricity tariff as recommended by the Government in January 2022,” said KPLC.

The 15 percent tariff reduction saw the basic electricity revenue drop by 6.69 billion shillings. The utility firm said during the review period profit before tax also decreased to 1.6 billion shillings from 5.7 billion shillings in a corresponding period last year.

Growth in electricity during the review period was supported by growing energy demand occasioned by increased economic activities and an expanded customer base. As a result, electricity sales grew by 4,764 Gwh.

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Non-fuel power purchase costs increased from 40.5 billion shillings to 43.9 billion shillings owing to additional electricity purchases made during the period to support growth in demand. Similarly, fuel costs increased to 15.1 billion shillings from 10.9 billion shillings in a corresponding period last year, attributable to a significant increase in fuel prices during the period under review.

Finance costs also increased to 7.4 billion shillings from 6.8 billion shillings resulting from a rise in unrealized foreign exchange loss arising from the revaluation of foreign-denominated loans as a result of the depreciation of the shilling against major currencies.