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Kenya Power and Lighting Company (KPLC) has reported a significant drop in its net profit for the financial year ended June 2025, primarily due to lower electricity tariffs, reduced foreign exchange recoveries, and increased finance costs.
Nairobi, Kenya – Kenya Power, the nation's electricity distributor, announced on Tuesday, October 7, 2025, a substantial 18.7% decline in its profit after tax, settling at KSh 24.47 billion for the financial year ended June 2025. This marks a decrease from the KSh 30.08 billion recorded in the previous year, a development largely attributed to government-led tariff adjustments and the stabilisation of the Kenyan Shilling.
The utility firm's total revenue from electricity sales fell by KSh 11.84 billion to KSh 219.29 billion, down from KSh 231.12 billion in 2024. This reduction is a direct consequence of lower base tariffs, implemented to ease the cost of electricity for consumers, and decreased foreign exchange cost recoveries. Despite the profit dip, Kenya Power reported an increase in electricity sales by 887 GWh, driven by higher customer uptake and improved network reliability.
The government's intervention in electricity tariffs has been a recurring theme, aiming to balance consumer affordability with the financial health of the state-owned utility. In January 2022, a presidential proclamation led to a 15% reduction in consumer prices, with a further 15% reduction anticipated from renegotiated Power Purchase Agreements (PPAs). These tariff adjustments, while beneficial to consumers, have directly impacted Kenya Power's revenue streams. The stability of the Kenyan Shilling, while reducing forex-linked income, positively impacted power purchase costs, which are largely denominated in foreign currencies, leading to a KSh 5.94 billion decrease in these costs.
Kenya Power operates under the guidance of the Companies Act 2015, International Financial Reporting Standards (IFRS), and the Public Audit Act 2015, among other regulations. The Board of Directors is responsible for the accuracy and completeness of its annual reports, which are subject to adoption by shareholders. The recent financial results highlight the delicate balance between regulatory mandates, such as tariff reductions, and the company's financial sustainability.
Dr. (Eng) Joseph Siror, Kenya Power's Managing Director and CEO, stated in a press statement that the company's focus on affordable electricity and improved efficiencies had boosted operational performance. He noted that the declining base tariff reflects the government's commitment to lowering electricity costs, which, in turn, allows Kenya Power to leverage economies of scale to remain profitable. The Board of Directors acknowledged that external factors constrained profitability but expressed satisfaction with strong operational progress and prudent cost management.
The decline in profitability, while cushioned by operational efficiencies, highlights the ongoing financial pressures on Kenya Power. The government's continued focus on reducing electricity costs for consumers may further impact the company's revenue in the short term. However, the stability of the Kenyan Shilling has positively influenced power purchase costs, mitigating some of the financial strain.
While the recent financial report details the impact of tariff adjustments and currency stability, the long-term effects of these policies on Kenya Power's investment capacity and infrastructure development remain a subject of ongoing analysis. Past controversies, such as the KSh 1 billion token scandal in 2018, underscore the need for robust internal controls and transparency. Additionally, disputes with county governments, like the KSh 3 billion standoff with Nairobi County over unpaid bills in February 2025, present ongoing challenges.
Kenya Power's audited financial results for the year ended June 30, 2025, were released on Tuesday, October 7, 2025. The Board has recommended a final dividend of KSh 0.80 per share, in addition to an interim dividend of KSh 0.20 per share already paid, subject to shareholder approval at the upcoming Annual General Meeting.
Stakeholders will be closely watching Kenya Power's strategic focus on modernising the national grid, accelerating customer connections, and driving digital transformation to improve reliability and reduce losses. The company's ability to reinforce financial sustainability through prudent cost management, optimised capital allocation, and robust revenue growth will be key to its future performance.
Previous reports have highlighted Kenya Power's efforts to recover from past financial challenges, including losses incurred from fraudulent token sales and disputes over unpaid bills with various entities. The ongoing commitment to grid upgrades and loss reduction initiatives remains a critical area of focus for the utility.
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