Kenya Power has hired Deloitte& Touche LLP to lead the process of restructuring the utility firm’s Board.
Restructuring of the Kenya Power Board is meant to safeguard the integrity of both minority and majority shareholders and to transform Kenya Power into a commercial outfit and delinking it from government interests.
- At an extraordinary general meeting on 10th November 2023, shareholders voted to restructure the company’s Board of Directors to reflect its shareholding structure.
- Four directors will be elected by minority shareholders while the other five directors will be appointed by the National Treasury-which is the utility company’s majority shareholder.
- The state utility firm is technically insolvent, remaining in a negative working capital position with its current liabilities outstripping current assets.
Deloitte will oversee the nomination and election of independent directors to the Kenya Power Board, to provide assurance on the integrity of the process and provide support.
Kenya Power posted a net loss of KSh 3.2 billion for the full-year period ended 30th June 2023 compared to a net profit of KSh 3.3 billion at the end of the 2022 financial year.
The International Monetary Fund (IMF) has been pushing the Kenya Government to shake up the board of the power utility firm and settle huge debts owed to the firm as part of the reforms to revitalize the loss-making monopoly.
- The IMF has insisted that offsetting Kenya Power’s debts and retooling its Board should be speeded up to boost the firm’s financial fortunes.
- Kenya Power has over the past few years relied on the National Treasury for bailouts.
- TheIMF says that the utility company’s liquidity gap was Sh64 billion as of June 2022.
“The 2023 comprehensive revision of base electricity tariff and a Cabinet approved action plan to strengthen KPLC’s financial health should be steadfastly implemented while monitoring any residual fiscal risks,” the IMF says in a report released on Wednesday.