IMF push Kenya Power into raft of changes
By John Otini, July 28, 2023
The International Monetary fund (IMF) is backing Kenya Power Limited Company (KPLC) bid to offer minority shareholders board representation.
The Bretton Woods institution is also in the mix in efforts by the State to make KPLC cede transmission assets to Kenya Electricity Transmission Company (Ketraco) by 2024.
According to reports, these deals which were approved by the Cabinet in May this year are part of efforts meant to enhance transparency, return to liquidity and inclusivity within the organization.
“The action plan to restore KPLC medium term profitability and cover liquidity gaps was approved by Cabinet,” IMF said in its Kenya update, which means that minority shareholders can now have a voice in the decision-making process of Kenya Power, allowing them to participate in key discussions and contribute to the company’s strategic direction.
“We estimate that with the support from the new tariff structure and continued pass through of variable costs and effective implementation of the action plan, KPLC’s liquidity gap will see an accelerated reduction,” IMF said.
As part of the restructuring efforts, the government will transfer all transmission assets currently owned by Kenya Power to Ketraco by December 2024.
These development are seen as major steps towards ensuring fair representation and aligning the interests of all stakeholders, both major and minor, within the organization.
IMF also notes that Kenya agreed to reduce KPLC system losses from 22 per cent to 14 per cent to boost KPLC earnings.
KPLC increased power tariffs this year despite President William Ruto’s assurances that power prices will not increases indicating the hidden hand of the IMF.