Kenya Power bets on technology to tame losses

Kenya Power staff at work in Sakutiek village on the border of Nakuru and Narok. [Antony Gitonga, Standard]

Kenya Power is searching for a technology firm to develop systems that it expects will put it firmly on a recovery path.

The power distributor said it is looking for an innovative technology partner that will design systems to enable it to overcome challenges that have been holding it back.

These include power system losses that cost the company billions of shillings every year.

Other areas that the firm expects to streamline through technology include revenue collection and diversification, and digitisation of the electricity distribution system.

Kenya Power in a notice inviting firms to express interest in the contract said the “overall result must be a transformed customer experience, improved financial performance and a motivated workforce.”

“The company now intends to develop and implement various innovative technologies and solutions on a pilot turnkey basis in conjunction with an innovation technology partner,” said the notice.

“The technologies and solutions will address the various challenges currently being experienced within commercial services, network management, customer services and customer payments.”

Kenya Power has been implementing reforms, initially aimed at enabling turnaround after it reported a loss in 2019 but these have been broadened into a sector-wide programme that aims at reducing the cost of power.

The firm noted that the challenges it has been experiencing have been due to both the macro-economic environment and internal business processes.

Among the issues that it identified in the notice include a steep rise in system losses that reached 24 per cent in the year to June 2021.

The losses, Kenya Power said, are due to “rapidly expanding network and increased pilferage, which are a major threat to the sustainable growth of the company.”

A fast-paced growth in the number of customers that now stand at 8.5 million has also led to increased complaints on billing and service quality.

“The combination of these pressures requires the company to adopt business innovation to better position itself to serve its customers, cut costs and substantially grow its revenue in order to remain competitive in this fast growing and changing energy market,” said Kenya Power.

“The commercial and operational requirements for Kenya Power now demand for optimised, seamless, simple, business process that are supported by high-performance automation technologies and systems.”

Kenya Power reported a Sh939 million net loss in the year to June 2020, the first in nearly two decades, which saw the firm start implementing a raft of measures to save itself.

The government would later start a sector-wide reform process aimed at salvaging Kenya Power as well as reducing the cost of energy.

While the reforms are still being implemented, the little that has been done appears to be bearing fruit, seen in Kenya Power’s latest financials where it reported a net profit of Sh3.82 billion for the six months to December 2021 against Sh138.36 million in 2020.