Kenya Power Consumers to Start Paying Bills in US Dollars
Kenyan consumers are on the brink of a significant change in their utility payment habits, as the Kenya Power and Lighting Company (KPLC) announces plans to implement electricity bill payments in US dollars.
The approval for this move has been granted by the government, marking a pivotal development in response to the ongoing depreciation of the Kenyan shilling.
Stephen Vikiru, the Finance Manager at KPLC, disclosed that the company is currently in the process of establishing accounts to facilitate the acceptance of foreign currency payments from customers.
This decision comes after extensive consultations between KPLC, the Energy and Petroleum Regulatory Authority (EPRA), and the Ministry of Energy.
Vikiru emphasized that the necessary approvals have been obtained, and the company is actively working on setting up collection accounts that will seamlessly integrate with their payment systems.
How does weak shilling affect KPLC revenue
The rationale behind this shift lies in the adverse impact of the weakening Kenyan shilling on KPLC’s financial performance.
In the audited financial results for the year ending June 2023, the utility company reported a substantial net loss of KSh 3.2 billion.
Joseph Siror, the Managing Director of KPLC, attributed this financial setback to the devaluation of the shilling and the exorbitant costs associated with power purchases from electricity producers.
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While revenue from electricity sales experienced a notable 21% growth, increasing from KSh 157.3 billion to KSh 190.9 billion, operational costs more than doubled, reaching KSh 15.02 billion.
The surge in operational expenses is attributed to the fluctuations in foreign exchange rates, particularly since a significant portion of the company’s loan portfolios is denominated in US dollars.
As the Kenyan shilling faced a low of KSh 163 against the US dollar in January 2023, KPLC’s strategic move to accept bill payments in US dollars reflects an adaptation to the economic challenges posed by currency devaluation, to stabilize revenue streams and mitigate the impact on the company’s financial health.
Kenya Power Consumers to Start Paying Bills in US Dollars
