Nairobi — Kenya Power has reported a major drop in earnings for the half year ended December 31 2022 posting a Sh1.1 billion loss compared to a Sh3.82 billion profit posted in the same period in 2021.

The drop was attributed to increased foreign exchange losses and the implementation of the 15 per cent reduction of the end user electricity tariff in January last year.

As a result of the tariff reduction, the basic electricity revenue for the six months period decreased by Sh6.69 billion.

On a positive note, the Company recorded a 4.4 per cent growth in electricity sales to 4,764GWh for the period compared to a similar period last year.

"The growth in sales was driven mainly by growing energy demand occasioned by increased economic activities and an expanded customer base," said Kenya Power.

In the period, operating costs increased from Sh19.03 billion to Sh21.7 billion due to increased foreign exchange losses arising from revaluation of outstanding payments to power generators denominated in foreign currencies as a result of the depreciation of the Kenya Shilling.

Non-fuel power purchase costs increased from Sh40.4 billion to Sh43.88 billion owing to additional electricity purchases made during the period to support growth in demand.

Similarly, fuel costs increased from Sh10.8 billion in the previous period to Sh15.08 billion attributable to the significant increase in fuel prices during the period under review.

Finance costs increased to Sh7.39 billion from Sh6.77 billion resulting from a rise in unrealised foreign exchange loss arising from revaluation of foreign-denominated loans as a result of depreciation of the Shilling against major currencies.