Kenya Power now picks advisor for KETRACO assets transfer

Kenya Power has finally picked an advisor to help assess the value of its transmission assets before they are transferred to the Kenya Electricity Transmission Company (KETRACO).

The government of Kenya owns 50.1% stake in Kenya Power and 100% stake in KETRACO. The proposed transfer of the utility’s transmission assets to KETRACO is part of a strategy to settle Kenya Power’s on-lent loans.

Kenya Power owns a vast network of transmission lines and related infrastructure which it built before the establishment of KETRACO in 2008. Kenya has a network of 8,362km of transmission lines, out of which Kenya Power owns 3,466km and 9,121 towers.

The company is one of the richest in Kenya, with assets worth Ksh385 billion as of June 2024, according to its latest financial results.

KETRACO is now the parastatal that is tasked with expanding the country’s high voltage power transmission infrastructure.

Kenya Power kicked off the process of transferring its transmission assets to the fully State-owned KETRACO last year in order to offset its debts that it borrowed through the government.

The utility has now picked an advisor to help in the process of assessing the assets. This has been revealed by the International Monetary Fund (IMF) in its latest report on its ongoing loan deal with Kenya.

An adviser has been onboarded to facilitate assessment of assets to be transferred to Kenya Electricity Transmission Company Ltd (KETRACO)

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The IMF however did not disclose the identity of the advisor that has been picked by Kenya Power and the timelines within which the process will be completed.

Kenya Power Managing Director Dr Joseph Siror previously said that the utility will transfer transmission lines, substations, and land that these assets are occupying to KETRACO to enable it offset the dollar-denominated loans.

The Nairobi Securities Exchange (NSE) listed company expects the removal of the on-lent loans from its books will help mitigate against foreign exchange losses.

Forex costs have a huge bearing on the company’s financial results. In the year to June 2024, Kenya Power made a record Ksh30.08 billion net profit after receiving a helping hand from a strong shilling, helping cut its finance costs.

On settlement of the outstanding Rural Electrification Schemes (RES) operations and maintenance cost, the costs shall be settled once the transmission assets are valued and transferred to KETRACO. The costs shall be netted off from the on-lent loans issued by the government of Kenya to KPLC.

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