Kenya Power has stopped commercial banks and other third parties from renegotiating new contracts to sell prepaid electricity tokens.
Geoffrey Muli, the company’s interim managing director, said on Thursday that after the current contracts expired on August 31 and the company will not enter into fresh negotiations.
As of the end of June 2020, Kenya Power owned and ran the majority of the nation’s power transmission and distribution systems and sold electricity to over eight million people.
The main responsibilities of Kenya Power are to create and maintain the power distribution and transmission network, retail electricity to its customers, and prepare for adequate electricity generation and transmission capacity to fulfil demand.
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The firm’s approach goes against the promises commercial banks made to their clients that the decision was only temporary.
“We have no immediate plans to bring the third parties back, maybe under a different arrangement. If the need arises then we can think about it but for now, no,” Mr Muli said.
According to Mr Muli, there is no need to bring back third parties because more than 95% of the company’s clients are pre-paid and use the 888880 Paybill.
Given that banks and other third parties received commissions for the purchases made under the prior contracts, the state-owned power company is depending on the use of its internal payment channels by prepaid consumers to prevent fraud and safeguard profits.
According to Mr Muli, they must ring-fence their systems and ensure that they are not accessible to a large number of individuals because, in such a scenario, they won’t be imagining that the presence of third parties exposes our earnings due to fraud.
The 15% fall in energy rates that went into effect in January also hurt profits, forcing the company to take cost-cutting measures to earn more money for system upgrades and debt repayment.
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