President William Ruto, on Tuesday, May 16, during a cabinet meeting at State House, Nairobi, announced that he was hell-bent on turning around Kenya Power's fortunes.
True to the Head of State’s vow, the National Treasury and the Ministry of Energy on Wednesday, May 17, rolled out a framework that would make the energy transmission company start recording positive growth and lower the cost of electricity.
The turnaround adopted a multifaceted approach, with the key concentration being offloading some of Kenya Power's assets and restructuring its board.
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.
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.
