Nairobi — The government intends to acquire a controlling stake in country's electricity distribution company.

Discussions on the matter were on, Energy minister Kiraitu Murungi and permanent secretary Patrick Nyoike told the parliamentary Committee on Energy, Information and Communication on Wednesday.

The minister said the government sought to increase its shareholding in Kenya Power and Lighting Company (KPLC) by converting its preferential shares worth Sh16 billion into ordinary shares.

This will raise its shareholding to 75 per cent. It will then attempt to raise Sh10 billion through a rights issue, with the final result being ownership of 51 per cent of KPLC.

The Sh10 billion will go into the development of infrastructure, Mr Murungi said. Eventually, the government would have a controlling stake in the company's affairs that will enable it to guide its development.

The statement follows public criticism of KPLC for declaring a Sh2.8 billion profit for the year ended December 2009 despite rising electricity costs.

MPs and various companies have protested against the high cost of electricity. KPLC was accused of concentrating more on making profits than delivering service, its core mandate.

"A healthy balance sheet to KPLC is a sickness to the customer," said Turkana Central MP Ekwee Ethuro, who noted the cost of power would affect the country's productivity as proved by World Bank studies.

The government owns 48 per cent of the company, with the rest in the hands of other shareholders, complicating matters for KPLC.

"In walking that tight rope, KPLC has done well. But the government is not interested in making profit but the provision of modern services to our people," Mr Murungi told the MPs on Tuesday.

He admitted KPLC's dual mandate as a public listed company and a provider of services had placed it at a crossroads as shareholders demanded profits and the government services.