Power distributor eyes new revenue streams in a five-year strategy
Kenya Power (KP) is eyeing to grow its non-core revenue to supplement income from electricity sales, as the company seeks to lay a firm foundation for a sustainable business in the next century.
The firm’s chief executive and managing director Joseph Siror said the company intends to raise its non-core revenue from 1.7 per cent to 3 per cent of the total revenue over the next five years through investments in fiber and general consultancy at the local and regional levels through its subsidiary, the Institute of Energy Studies and Research (IESR).
However, it is not clear how KP will pursue its fibre project, with the impending transfer of all its transmission assets to the Kenya Electricity Transmission Company (Ketraco) announced by the National Treasury Cabinet Secretary Njunguna Ndung’u in his budget speech last week on Thursday.
As part of a raft of restructuring measures intended to see stem the financial losses to the listed state firm, the government said it will settle the Sh19.4 billion debt the Rural Electrification Schemes operation and maintenance cost deficit and ensure the two enter into a commercial contract for future rural electrification schemes. In the financial year to June 2022, the listed firm’s electricity sales shot up by 9.1 per cent to Sh157.4 billion from Sh144.1 billion, aided by tariff adjustments.
The troubled utility power distributor has partnered with Safaricom in a pilot project to install smart poles to support provision of high-speed internet connectivity in six locations within Nairobi.
Siror was addressing 592 students who had graduated from IESR over the weekend. IESR is mandated to champion the Company’s revenue diversification agenda. The institute also undertakes consultancy and research business within the energy value chain and has the capacity to test and calibrate meters and equipment for the company and other entities at a cost. “Our focus is to ensure that IESR becomes the Centre of Excellence in Africa, leveraging on Kenya Power as a market leader in the region. Like other utilities that have embraced revenue diversification, through IESR, Kenya Power will continue to explore avenues to tap into investments in various areas including research, capacity building and developing the right skills to serve the region’s needs,” Siror said.