Kenya: State Firms Now Largest Kenya Power Defaulters

3 September 2020

State agencies top the list of main electricity bills defaulters, which have driven Kenya Power to the edge, the Nation can reveal.

Confidential documents shared among energy stakeholders including the regulator, the Ministry of Energy and Kenya Power show that parastatals, national and county governments have a pending electricity bill of Sh4.7 billion as at the end of June 2020.

The government has also accumulated billions in deficit for the money meant to fill the gap left by lower tariffs for rural customers under the Rural Electrification Scheme.

The figure has risen to hit Sh11.95 billion depicting the state as shooting itself in the foot by hurting one of its key agencies in driving economic growth.

Kenya Power Managing Director Bernard Ngugi last month disclosed the firms struggle to recover debt owed by state agencies, including seeking help from the National Treasury.

Positive response

"We have received a positive response in the settlement of the outstanding electricity bills from majority of the State agencies as a result of the intervention by the National Treasury. This has complemented our internal efforts in revenue collections and debt reduction as we continue to engage the government agencies," Mr Ngugi said without disclosing how much was collected from the state agencies.

The government holds majority shares in the Nairobi Securities Exchange-listed firm at 50.1 per cent, adding to the irony of stet stifling its own investment as Kenya Power continues to sink deep into financial quagmire.

County governments, health facilities and other devolved services alone had unpaid bills of Sh2.4 billion as at June 30. Going by their monthly billing of Sh191 million, the bill is more than 12 months of default for state entities.

The national government whose June billion was Sh128 million had an outstanding debt of Sh701.2 million or at least five months of bills unpaid, according to the documents seen by Nation.

The debt by government agencies now adds to the pain of pending payments for Kenya Power which has been worsened by the Covid-19.

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