Kenya Power seeks debt collectors to recover Sh5 billion bills

Kenya Power is seeking debt collectors to help recover outstanding bills of Sh5 billion from customers who have been disconnected from the grid.

The move is part of the electricity distribution new strategy to net defaulters and root out electricity thieves using illegal connections to the national grid to deprive the company of revenue as it seeks to lift itself out of a deep earnings slump

While Kenya Power unpaid bills amount to more than Sh20 billion, the 5 billion is debt that has accumulated over years.

Kenya Power said in internal documents seen by the Business Daily that the debt is owed by customers who cancelled their accounts on request and those whose accounts were terminated for defaulting.

“The Kenya Power requires debt collection services for an outstanding finalised debt of Sh5.2 billion,” said Kenya Power in a tender notice.

About Sh2 billion of the debt is owed by customers in Nairobi, while those at the Coast Region owe Sh845.7 million.

North Eastern Kenya customers have not paid Sh620.8 million.

Customers in Western Kenya owe Kenya power Sh386.9 million while those in South Nyanza are being pursued for Sh343.07 million.

Most of the debt dates back from earlier years up to the month of December, said Kenya Power.

It currently has about 7.4 million customers, with the new users coming from rural Kenya where revenues are low on muted demand.

More than half a million customers, the company said, had failed to pay electricity bills in the three months to June, pushing new defaults by Sh3.9 billion.

Kenya Power is seeking to lower the debt boost sales and recovery from profit slump.

It has issued its third profit warning in a row, citing reduced electricity consumption due to coronavirus control measures and rising cost of buying wholesale power from firms like KenGen.

The alert means its net earnings will decline by at least 25 percent of last year’s profit of Sh262 million — which was the worst in 16 years.