Kenya Power has been granted authorization by the government to invoice certain customers in US dollars. KPLC Finance Manager Stephen Vikiru said the utility firm is in the process of setting up accounts to receive foreign currency payments from consumers.
For several years, Kenya Power has been requesting authorization from the Energy and Petroleum Regulatory Authority (EPRA) to bill certain customers, particularly those earning in foreign currencies like US dollars and euros, in their respective currencies.
Initially, there were concerns among some customers regarding the legality of paying in foreign currencies, especially considering that the utility already accounted for forex losses through a component in electricity bills.
However, Kenya Power has clarified its stance to address these concerns. They have assured that only customers who voluntarily opt for it will be billed in foreign currency. Additionally, exchange rates for billing will be agreed upon during each billing period, ensuring transparency and
“There was a lot of engagement on this right from the top, including the regulator and the government, and we got the necessary approvals. We are in the process of opening collection accounts in a manner that is well interfaced with our systems,” said Finance Manager Stephen .
The finance manager said that firms like fresh produce exporters who earn in foreign currency were being inconvenienced by having to exchange their foreign currency into shillings to settle their bills.
“For example, a horticulture company that exports flowers, they have to go sell the dollars or euros they have received to pay their bills yet we actually need those currencies,” he noted.
Kenya Power returned to profitability in the first half of the fiscal year ending in December 2023, reporting a net profit of KES 319 million. This marks a notable recovery compared to the net loss of KES 1.14 billion reported during the corresponding period in the previous year.
Analysts have noted that the move would help KPLC solve its forex-related challenges, including debt settlement, since most of its loan portfolios are denominated in US dollars.
Kenya Power has been suffering significant forex losses as finance costs more than doubled to KES15.02 billion, marking a sharp increase from KES 7.39 billion in the preceding year.
“This increase is attributed to the rise in unrealised foreign exchange losses on loan revaluations, a consequence of the weakening of the Kenya shilling against major foreign currencies in which most of the loan portfolio is denominated,” said the firm.
Kenya Power said it has taken the opportunity presented by the strengthening of the local currency over the last two weeks to settle its forex obligations.
