This archive report was first published on 24 August 2020.
Kenya Power is facing a significant challenge in recovering unpaid bills from its customers, with outstanding debts amounting to Sh5 billion.
According to internal documents seen by the Business Daily, the debt is owed by customers who cancelled their accounts on request and those whose accounts were terminated for defaulting.
Kenya Power has issued a tender notice seeking debt collection services to recover the outstanding debt of Sh5.2 billion.
The company has identified specific regions where the debt is concentrated, with Nairobi customers owing Sh2 billion, Coast Region customers owing Sh845.7 million, and North Eastern Kenya customers owing Sh620.8 million.
Most of the debt dates back to earlier years, with the company stating that it currently has about 7.4 million customers, including new users from rural Kenya where revenues are low due to muted demand.
Kenya Power has issued its third profit warning in a row, citing reduced electricity consumption due to coronavirus control measures and rising costs of buying wholesale power from firms like KenGen.
The company's net earnings are expected to decline by at least 25 percent of last year's profit of Sh262 million, which was the worst in 16 years.
