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Power company reform strategies on course, CS Juma

The Government has assured Kenyans of a vibrant and profitable Kenya Power Company (KP) once the turnaround strategy that is already bearing fruits is complete as company registered Sh8.2 billion profit.

Energy Cabinet Secretary (CS), Amb Monica Juma, said that restructuring processes is well on course to ensure efficiency at KP which will in return bring down the cost of electricity.

The CS said that reforms at KP are not just any other reforms since they are treating it as a special national project and they have a Cabinet Subcommittee that is engaged on the matter on a daily basis and the statement and actions by the President on the matter are very clear.

The CS, speaking, at a Nairobi hotel during a KP investors briefing, called on all Independent Power Producers to be part of the reform strategy and to embrace negotiation so that they can engage and come up with a win-win solution that secures a sustainable energy sector in the Republic of Kenya.

Amb Juma said that the ongoing reforms started with a sharp focus on the KP and its entire management structure and the appointment of the new Board.

“To augment and fast-track that process in a structured manner, the President appointed a taskforce to look into the critical components in the value chain, key among them the Power Purchasing Agreements and the Taskforce, has produced a report with several recommendations to improve efficiency and profitability of KP,” said Amb Juma.

She added that the reforms begun even before the Taskforce Report and the return to profitability, is testament that the reforms are working, adding that they are scaling the reforms across the entire sector in order to secure the economy by ensuring the provision of affordable and reliable electricity.

Amb Juma said that the Taskforce recommendations pertaining to the renegotiation of Power Purchasing Agreements is aimed at improving efficiency and effectiveness of each of the sector players with the objective of lowering the cost of energy.

“Our cost of energy is far too high for any productivity to be sustained,” said the CS, adding that she just returned from COP-26 in Glasgow, where Kenya’s energy sector was a primary reference point for the world and the exemplary renewable energy mix in the country should be felt by the locals through cheap electricity.

The CS said that Kenya was endowed with vast human and natural resources, geostrategic position that makes the country, the regions, and continents gateway and that this coupled with political stability, should drive the country to become the regions manufacturing hub, as captured in the economic blueprint Vision 2030 and the ‘Big4’ Agenda with energy as a key driver.

“Energy does play a central and strategic role in the pursuit and attainment of Kenya’s development aspirations. It is the driver for individual and societal aspirations in terms of green growth which is the next frontier for human development,” said Amb Juma.

The CS said that the measure of performance for KP and the energy sector as a whole, will be to provide clean, affordable, reliable, secure energy services at the least cost as well as protect the environment.

KP Acting Managing Director and CEO, Rosemary Oduor, said that the profit before tax grew to Sh8.2 billion coming from a loss of Sh7.04 billion a 216 percent growth, driven by the increased revenue of Sh144 billion, which is an eight percent rise from the previous year, motivated by the increase in new customers.

“We scaled down our operating cost by 17 percent by improving efficiency in operations with the Covid-19 being a blessing in disguise, where we held virtual meetings thus reducing our travelling cost.

 

We have enhanced our capacity by onboarding nine new sub-stations and refurbishing another five sub-stations which led to an enhanced network capacity of 500 Megavolt amperes (MVA). In addition we extended the network by 536.4 kilometers and this led to onboarding customers who were far from the network,” said Oduor.

The MD explained that KPLC was in the process  of automating the network and in the last Financial Year the Company commissioned the distribution management system automation, which will enable it carry out processes faster and isolate faulty areas quickly, whereby power outages will be restored at the control center.

State Department for Energy Principal Secretary (PS) Maj Gen (Rtd) Gordon Kihalangwa, underscored the need for KP to have consistency in their performance and maintain the profitability trajectory that was exhibited in the last Financial Year, adding that the Ministry will give the company all the support needed to ensure that the Company remains vibrant and profitable.

“There are quite a number of things that need to be implemented in the Taskforce Report which indicates that right now we stand at a leakage of about 24 percent and if that is addressed and we also get a proper human resource instrument, we will likely see Kenya Power bringing in better results,” said Kihalangwa.

 

By Joseph Ng’ang’a

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