Kenya Power has written off Ksh 2 billion in unpaid electricity bills in 2024, citing the debts as unrecoverable, pushing its total cumulative write-offs to Ksh 19.28 billion.
This recurring challenge reflects the company’s ongoing struggle with customer defaults, which have surged significantly over the past years.
By June 2023, unpaid bills had reached Ksh 35 billion, an alarming figure that has strained the utility provider’s finances and operational sustainability.
The bulk of the debt stems from a combination of private customers and public institutions.
Public agencies, including national and county governments, contribute to about 33% of the total arrears, creating additional hurdles for Kenya Power.
Despite implementing measures such as disconnecting defaulters and employing debt recovery agencies, the company has found limited success in curbing these defaults.
Its reliance on post-paid electricity metering has also played a role in the accumulation of unpaid bills.
These write-offs come amid broader financial challenges for the company, including a net loss of Ksh 3.19 billion in 2023.
Rising operational costs, coupled with a growing inability to recover owed funds, have forced Kenya Power to rely heavily on Treasury bailouts.
This dependency has raised significant concerns among stakeholders, with calls for greater transparency and accountability in the company’s financial practices.
The African Development Bank (AfDB), one of its financiers, has emphasized the need for government intervention to settle public sector debts and stabilize the compan.
To address these challenges, Kenya Power has outlined plans to phase out post-paid meters in favor of pre-paid systems, particularly in rural areas.
This move aims to ensure upfront revenue collection and reduce the risk of future defaults.
The firm is also exploring other strategies, such as diversifying revenue streams, to bolster its financial resilience.
However, the scale of unpaid bills highlights the deeper systemic inefficiencies within the company, which require comprehensive reforms.
Critics argue that frequent write-offs erode consumer confidence and create a culture of non-compliance.
Moreover, the financial instability of Kenya Power has far-reaching implications for the country’s economy, particularly in sectors that rely heavily on affordable and reliable electricity.
High energy costs, exacerbated by these defaults, further threaten the competitiveness of Kenyan goods and services on global markets.
In the future, Kenya Power must urgently address its debt recovery mechanisms, enhance operational efficiency, and implement governance reforms to secure its financial future.
Without these interventions, the company risks further financial strain, with potential cascading effects on Kenya’s broader energy sector and economic stability.
