Kenya Power Chops Debt Collectors Returns By Half

Kenya Power will pay eight private debt collectors a 10 percent commission on every amount they collect as it races to recover Sh5.2billion.

The firm's managing director Bernard Ngugi yesterday said they has halved the commission from 20 percent as it aims to retain more of what is collected.

"They (the debt collectors) will get 10 percent of the money that they are able to recover from the accounts. Each region has one debt collector handling different number of accounts," Mr Ngugi said in Nairobi.

Mr Ngugi said the utility firm has no capacity to follow up all its debtors, and that the companies are critical to the it's renewed efforts to realise more revenue. "You might find that someone has accumulated a huge amount of unpaid electricity bills and then they relocate. We do not have the capacity to follow up on such cases. Debt collectors will help us to recover such dues," the MD said.

Mr Ngugi spoke at the opening of a new Kenya Power office in Mathare, Nairobi ahead of the opening of similar offices in Kibera and Mukuru kwa Njenga.

Kenya Power is owed Sh2.3 billion by its customers in Nairobi, Sh845 million in Coast, Sh298 million in Central Rift and ShSh386 million in Western.

It is also owed Sh171 million in North Rift, Sh245 million in Mt Kenya, Sh620 million in North Eastern and Sh343 million in South Nyanza. The company also aims to recover Sh2 billion which is lost through electricity theft, which is rampant in informal settlements, which has pushed the company's system losses to 24.7 percent.

Higher revenue collections from electricity sales are among the company's targets in its efforts to boost its shaky financial position, and has to that end rolled out a plan to connect 55,000 small and medium-sized enterprises and 6,000 large power users to smart meters by the end of June.

To further boost its liquidity, the company is also looking for lenders to help refinance its Sh56.6 billion commercial debt as it seeks longer repayment periods and lower interest rates to cut its debt servicing which has hit Sh20 billion per year.

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