On May 30, 2022, Kenya Power received a significant boost in its efforts to revamp its operations with the announcement of a Sh86.95 billion State loan.
The loan, which was tapped from two international lenders, the International Development Agency (IDA) and the International Bank for Reconstruction and Development (IBRD), is aimed at supporting the power utility's turnaround.
According to Treasury documents tabled in Parliament, Kenya tapped Sh60.29 billion ($520 million) from the IDA and Sh26.667 billion ($230 million) from the IBRD on March 18.
The funds will be used to shore up Kenya Power's finances, which are expected to take a hit of up to Sh26 billion in the current financial year due to the 15 percent cut on power tariffs.
The utility also needs funds to revamp its dilapidated transmission network to keep up with the growing demand and is bracing for cash buffers given the looming hit on its revenues due to the 15 percent reduction in the cost of electricity.
Kenya Power's management has estimated that the 15 percent cut on power tariffs will see it lose up to Sh26 billion in revenues, with the estimate not including a further 15 percent cut set to be effected before the end of June.
Despite the challenges, Kenya Power's turnaround continued in the six months ended December, with its net income increasing 27.6 times to Sh3.8 billion from Sh138 million a year earlier.
