The Kenya Kwanza government is looking at restructuring Kenya Power’s debt obligation with a view to enhancing its financial sustainability.
Treasury CS Njuguna Ndungu made the revelation on Thursday when presenting the 2023-24 Budget estimates in Parliament.
“To further enhance KPLC’s financial sustainability, the government will restructure the balance sheet mainly focusing on the huge loan balances, payables and receivables. This will in turn address the current huge liquidity gap at KPLC,” Ndungu said.
He said towards this end, the government intends to implement a four-point plan beginning with the transfer of all transmission lines and assets to Kenya Electricity Transmission Company (Ketraco).
Second, he said the government will settle outstanding rural electrification schemes operations and maintenance costs whose deficit stood at Sh19.4 billion as of June 2022.
To this end, KPLC and rural electrification and renewable energy cooperation will enter into a commercial contract for the future rural electrification schemes maintenance costs.
“Third, the government will develop and implement a turnaround strategy that includes the reduction of system losses from the current 22.4 per cent to 14.4 per cent by end of June 2025.”
Ndungu further said the government will establish a new governance structure of KPLC to give private sector stakeholders fair representation that reflects the company’s shareholding structure.
