Tariff regime slows Kenya Power revenue growth despite Sh25b profit

Kenya Power CEO Joseph Siror and General Manager Finance Stephen Vikiru at an investor briefing on the firm's full-year financial results in Nairobi yesterday. [Wilberforce Okwiri, Standard]

The existing electricity tariff regime has limited Kenya Power's revenue growth, even as the utility firm posted a profit after tax of Sh24.99 billion for the year ended June 2026.

The latest financials from the company show that while profit after tax for the period grew by 2.1 per cent, revenue increased by 8.6 per cent to Sh238.2 billion.

Profit before tax grew by 1.8 per cent, from Sh35.38 billion to Sh36.01 billion.

The paradox, as explained by Chief Executive Joseph Siror, is that the growth in profit during the period was not commensurate with that of revenue.

As electricity sales in terms of gigawatt-hour (GWh) improved by 12.05 per cent to 12,777 GWh, revenue went up by just 8.6 per cent.

In terms of unit purchases, the figure stood at 15,693, compared with 14,472 last year.

Siror pointed to the tariff regime as the reason behind this sluggish growth.

“For those who thought the cost of power has been going up, it has actually been coming down,” he said at a press briefing in Nairobi yesterday.

He explained that if the amount of power sold in GWh has gone up by 12.05 per cent, the expectation is that revenue should have also increased at the same rate.

“But the reason it went down is that, over the last control (tariff) period, which started in 2023, the tariff yield has been going down by almost Sh0.70 per year,” he said. “If you compare the tariff in 2023 vis-à-vis the last financial year, in terms of yield, it came down by almost Sh2.1.”

He added: “And that is reflected in the fact that, whereas we increased sales by 12.05 per cent in GWh, revenue increased at a slower pace.”

In March, the government rejected a proposed tariff revision by Kenya Power in a bid to save households and businesses from higher electricity costs. The tariffs would have increased electricity costs by over 30 per cent for some customers.

In June, Energy Cabinet Secretary Opiyo Wandayi said the tariff would remain unchanged for an unspecified period.

“Following consultations within government and engagement with key stakeholders in the sector, the retail electricity tariff review application that was submitted on March 31 by KPLC on behalf of the sector has been withdrawn,” he said.

Kenya Power is the country’s sole electricity distributor, serving 10.4 million customers. The company buys power from generators, including Kenya Electricity Generating Company (KenGen), and then sells it to customers.

The company has a network of 344,116km, supported by 87,723 transformers.

Last year, Kenya Power connected 411,710 new customers to the grid, which partly contributed to increased electricity sales.

General Manager Finance Stephen Vitari said that, apart from the new connections, performance in the period was also supported by growth across all customer categories.

Exports contributed the most growth in terms of unit sales from 73GWh in the previous financial year to 333GWh, an increase of 356.2 per cent.

“There are also initiatives in trying to ensure we replace faulty metres and that all electricity out there is actually measured and billed for payment,” said Vitari.

He also pointed out that distribution and transmission efficiency levels improved from 78.79 per cent to 81.42 per cent.

“That is a major milestone, and it has really fed into the revenue growth and profits we are seeing,” he said.