Ruto unveils master plan to overhaul Kenya Power and lower electricity cost
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Ruto rolls out a framework to restructure Kenya Power to make the unitility company profitable and lower electricity cost
Ruto rolls out a framework to restructure Kenya Power to make the unitility company profitable and lower electricity cost.
On May 16, during a cabinet meeting at State House in Nairobi, President William Ruto declared that he was determined to turn around Kenya Power’s fortunes.
The National Treasury and the Ministry of Energy unveiled a framework on May 17 in response to the president’s request, which would cause the energy transmission firm to begin recording positive growth and reduce the price of electricity.
The turnaround employed a comprehensive strategy, with the sale of part of Kenya Power’s assets and the restructuring of its board serving as the main focal points.
On offloading its assets, Kenya Power will sell its power transmission lines to Kenya Electricity Transmission Company (KETRACO).
National government will facilitate the sale of the transmission lines valued at Ksh20 billion.
KETRACO, which is also undergoing a major restructuring, will buy Ksh5.3 billion from energy-generating company KenGen.
After offloading its assets to KETRACO, Kenya Power will reduce the debts owed to suppliers by Ksh19 billion, and its outstanding loans will reduce by Ksh20 billion.
This was in line with Ruto’s promise that, “The new plan focuses on enhancing the company’s financial sustainability, particularly by addressing loan balances and the liquidity gap.”
On Tuesday, May 16, cabinet meeting, Ruto’s administration resolved to restructure the composition of the Kenya Power board.
“In line with the Kenya Kwanza Bottom-Up Economic Transformation Agenda, the composition of Kenya Power’s Board will be adjusted to reflect its shareholding,” the Cabinet resolved.
The government has approximately 51 per cent of shares in Kenya Power, while the private sector owns the rest.
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Government appoints all board members despite the private sector owning almost half of the parastatal.
In Ruto’s master plan, the government and private investors appoint directors proportionately to the shareholding.
On Tuesday, April 25, Trade Cabinet Secretary (CS) Moses Kuria divulged the government’s plan to sell Kenya Pipeline Company (KPC), Kenya Electricity Generating Company (KenGen), and Geothermal Development Company (GDC) to private investors.
“Government of Kenya wants to ensure that we exit the enterprise space and let the private sector grow. What we are doing is providing an environment conducive for investment,” Kuria stated while speaking at the Financial Services Forum during the US-Kenya Business Roadshow in New York, in line with Ruto’s plan to revive the economy.
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