The National Treasury has cut Kenya Power’s bailout this financial year by 75%, on the back of improving revenue and the expiry of the 15% tariff cut that will ease liquidity challenges.
Kenya Power will get KES 2.35 billion in support from taxpayers to partly offset the liquidity gap emanating from January 2022 electricity tariff reduction compared with KES 9.05 billion in the year that ended last June.
The electricity distributor estimates annual loss as a result of a tariff cut ordered by the previous regime of President Uhuru Kenyatta to ease living costs for households and businesses at KES 26.3 billion, injuring its cash flow position.
The 15% drop in power tariff ends this month, setting stage for higher bills from January 2023.
The Treasury further sees cost-cutting measures such as the renegotiation of Power Purchase Agreements (PPAs) with independent power producers (IPPs), further lowering the firm’s fiscal risks and enhancing its future sustainability.
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