Kenya Power Records Profit Decline

Kenya Power and Lighting Company (KPLC) announced on Tuesday, October 7, 2025, a net profit of KSh 24.47 billion for the financial year concluded on June 30, 2025. This represents an 18.7% decrease from the KSh 30.08 billion recorded in the previous financial year. The decline in profitability is largely attributed to the implementation of lower electricity tariffs and a reduction in foreign exchange recoveries.

Despite the dip in profit, the utility firm experienced an 8% growth in electricity sales, rising by 887 GWh to 11,403 GWh. Total revenue for the period fell by 5.1% to KSh 219.29 billion, down from KSh 231.12 billion in the previous year. This marks the first year-on-year revenue decline for Kenya Power since 2013.

Operational Efficiency and Cost Management

Kenya Power's Managing Director and CEO, Dr. (Eng) Joseph Siror, highlighted that the steady reduction in base tariffs over the past two years has made electricity more affordable for consumers, leading to increased consumption. The company also managed to reduce its operating expenses by KSh 3.86 billion, primarily due to lower expected credit losses and improved customer payment behaviour. Additionally, power purchase costs decreased by KSh 5.94 billion, a saving attributed to the stability of the Kenyan Shilling against major foreign currencies, in which most Power Purchase Agreements (PPAs) are denominated.

System efficiency improved to 78.79% from 76.84% in the previous year, a gain linked to ongoing grid upgrades, system reinforcement, and loss reduction initiatives. The company also successfully reduced its working capital deficit from KSh 27.44 billion to KSh 19.21 billion.

Historical and Political Context

Kenya Power, a publicly listed company with the Government of Kenya holding a controlling shareholding of 50.1%, has been listed on the Nairobi Securities Exchange since 1954. The company's core mandate is the transmission, distribution, and retail of electricity across the country. Over the past two decades, Kenya Power's revenue has increased sevenfold, and profit after tax has climbed significantly.

The government's commitment to lowering electricity costs is reflected in the reduction of base tariffs over the last two years. This policy aims to make electricity more affordable for consumers and leverage economies of scale for the company's profitability.

Laws, Policy, and Governance

The National Energy Policy 2025–2034 outlines a strategic direction for achieving universal electricity access by 2030 and increasing reliance on renewable energy. New regulations introduced in 2024 also allow private companies to invest in Kenyan transmission and distribution networks, aiming to increase competition and improve efficiency.

Stakeholders and Testimonies

Kenya Power's Board Chairperson, Joy Brenda Masinde, noted that the company is paying out a dividend to investors for the second consecutive year, reflecting strengthened investor confidence. The company's share price has appreciated by over 900% from a low of KSh 1.38 in December 2023 to over KSh 15, indicating renewed investor faith in its transformation.

Risks and Implications

While the stability of the Kenyan Shilling helped reduce power purchase costs, it also led to the reversal of KSh 7.89 billion in unrealised foreign-exchange gains, which drove up finance costs. System losses due to theft and leakages remain high at 22.6%, exceeding the global average of around 15%, a key focus area for reduction. The company has also faced challenges with ageing infrastructure, insufficient generation capacity, and inadequate maintenance, contributing to frequent power blackouts.

Timeline and Next Steps

Kenya Power connected 401,848 new customers during the financial year, surpassing the 10 million customer mark and bringing its total customer base to 10.1 million. The company plans to invest KSh 29 billion towards grid expansion, smart metering, and automation, and ICT. The Board of Directors has recommended a final dividend of KSh 0.80 per ordinary share, in addition to an interim dividend of KSh 0.20 per share already paid, bringing the total dividend payout to KSh 1.00 per share. Subject to shareholder approval, the final dividend is expected to be paid around Thursday, January 30, 2026.

What to Watch

Kenya Power's strategic focus for the coming years includes modernising its network to reduce losses, enhancing liquidity, accelerating customer connections, and expanding digital systems to improve efficiency. The company aims to reinforce financial sustainability through prudent cost management, optimised capital allocation, and robust revenue growth.