Right step by Kenya Power

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Editorials

Right step by Kenya Power


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Kenya Power chief executive Bernard Ngugi. FILE PHOTO | NMG

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Summary

  • The decision to retire expensive loans taken by Kenya Power signals the utility firm is serious about looking critically at aspects of its operations to avoid going down the bankruptcy path.
  • The company, which has a monopoly in electricity distribution, has reported massive losses over the past two financial years.

The decision to retire expensive loans taken by Kenya Power signals the utility firm is serious about looking critically at aspects of its operations to avoid going down the bankruptcy path.

The company, which has a monopoly in electricity distribution, has reported massive losses over the past two financial years.

A financially hobbled Kenya Power risks ushering in a new era of unreliable electricity supply, with dire consequences for the economy and peoples’ way of life. The company’s inefficiencies will also raise the cost of living and hurt the country’s industrialisation ambitions. It is therefore encouraging to see the utility firm look inward at the major issues afflicting it in the context of weaker-than-projected demand for electricity.

The latest measure is to review Sh65.96 billion worth of commercial debt to retire expensive ones through international partners with a view to boosting cash flows.

Kenya Power is also seeking to lower fixed charges, known technically as capacity charges, in contracts signed with electricity generating companies.

It must go further to look at other major cost items in its operations to ensure it remains a lean organisation.



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