Electricity distributor Kenya Power is now seeking approval to bill some of its customers in dollars, euros and other foreign currencies.
The move comes amid a looming shortage of forex in the domestic market and the exposure to the depreciating shilling.
Kenya Power is currently working with the Energy and Petroleum Regulatory Authority (Epra) seeking the base rate to be used in tariff determination for those paying in foreign currency.
According to Stephen Vikiru, the general manager in charge of finance at Kenya Power, the new move will enable them generate a reliable source of foreign currency to meet its obligations.
“We want to look at our customers whose income is in foreign currencies such as the export processing zones, foreign missions, and the horticulture industry and engage them to be able to pay us in hard currency
“The forex problem has been two-fold. The first is the fluctuation of the rate. Right now, if you go to market, you are buying a dollar at 126 to the Kenya Shilling which is a significant spread from the official rate. The second is the availability of foreign currency. Even with that spread, you are not able to get foreign currency,” Vikiru told Business Daily.
As earlier reported on WoK, Kenya Power doubled its net profits in the year that ended June 30, 2022.
According to the company’s end-year results which was released on Thursday, October 27, KPLC’s earnings in the previous year shot down from KSh 1.5 billion to KSh 3.5 billion.
The growth was attributed to growth in sales by at least 6.9 percent and improvement of 1.5 per cent in system efficiency.
The reduction in operation costs by use of strategic cost management initiatives was also attributed to the growth.
The other contributing factor was a 40.2 per cent increment in finance costs, attributable to the depreciation of the Kenya Shilling against major world currencies.
This resulted in a 37.5 per cent decline in gross earnings to settle at 5.12 billion compared to the previous trading period.
“Despite some curve balls, all our core business lines have registered remarkable improvement,” Acting managing director Geoffrey Muli said.
