Kenya power risks losing 40 billion in goods and services it provided which are not paid for. Speculations on whether the monopoly is broke have been raised.
In the past three months, a multi-agency team has been raiding some of these consumers who owed the company billions of shillings and disconnecting the supply to some of the factories that have been at the centre of this intricate scheme. The most affected areas are Nairobi’s Ruaraka and the Industrial Area. It is estimated that out of 25 per cent of the system losses, about 12.5 per cent relates to commercial theft by well-known companies and associated with well-known personalities.
When Mr Bernard Ngugi was appointed the Kenya Power chief executive officer on October 29, 2019, he promised to ensure the company’s business sustainability and make money for the shareholders. But 21 months later, Mr Ngugi has either been shown the door or simply jumped out -as the company continues to sink into financial blackouts, debts and possible collapse. With Mr Ngugi’s departure, Ms Oduor inherits financial turmoil at a company that posted an Sh3 billion loss in the previous fiscal year despite being a monopoly. While much of the fall is attributed to the purchase of expensive power, it is also blamed on cartels that have invaded the power sector, where they control the multi-billion-shilling procurement. As a result, Kenya Power is the bastion of dead stocks, theft of power and expensive power purchase agreements.
How the monopoly entity, Kenya Power, went from a profitable entity that made more than Sh130 billion in revenue to a loss-making entity that is burning all the cash has piqued the interest of investigators who are trying hard to figure out what went wrong. For the moment Kenya Power can only survive with a taxpayer bailout and the Treasury, which is already stretched thin and filling the pinch. To stay afloat, Kenya Power is depending on overdrafts to pay salaries and finance working capital as it’s is facing serious financial challenges and is unable to meet her current obligations to suppliers, lenders and shareholders.