Kenya Power sets eyes on diversification in new sustainability strategy

Kenya Power will focus on new business lines including selling internet, leasing its utility poles to internet service providers and building electric vehicle (EV) charging infrastructure to diversify its revenue as part of its sustainability goals.

The company launched its four-pillar Sustainability Strategy in Nairobi on Wednesday. The strategy will cover the financial years 2024/25, 2025/26, 2026/27 and 2027/28.

The strategy’s main pillar is the financial pillar, through which the utility will focus on diversifying its revenue to improve its cash flow. The company currently relies on revenue from electricity sales.

As part of this plan, Kenya Power also plans to enhance the capacity of its Ruaraka-based Institute of Energy Studies and Research (IESR) and monetize its vast portfolio of data. It will also run a Super Energy Service Company (ESCO).

The utility plans to incentivize the Time of Use (ToU) tariff to increase uptake, promote use of efficient and energy saving electric appliances and promote e-cooking. Further, the company seeks to enhance the implementation of improved Last Mile Connectivity Programmes.

The other pillars under the strategy relate to improving operational excellence, enhancing customer centricity and growing its human capital.

The Sustainability Strategy will guide us to anchor our operations as a responsible corporate citizen on reliable short-term and long-term activities that will enable us to remain responsive to emerging challenges such as climate change

Kenya Power managing Director Dr Joseph Siror

Kenya Power made a record Ksh231.1 billion in revenue in the year to June 2024, primarily from electricity sales. The company, which is one of Kenya’s largest by revenue and asset base, has been slow to diversify owing to its position as the country’s only power distributor.

In recent years however, the company has made steps towards opening up new revenue sources, particularly selling internet and leasing its vast countrywide network to internet service providers. This push comes at a time when the company is facing new threats to its business, especially the rise of solar PV which is chipping away into its bread and butter.

At the same time, its distribution monopoly is coming to an end as Kenya moves to enact laws that will facilitate other players to join the electricity distribution market by using the existing power distribution network built by the firm.

KenGen, which spun off Kenya Power in the late 1990s, has been trailblazing the revenue diversification route among energy sector parastatals. The company for decades exclusively relied on selling electricity to Kenya Power but has in recent years expanded into drilling contracts in the region and undertaking consultancies.

The company also recently announced that it is set to earn more than Ksh4.14 billion from the sale of carbon credits generated from its network of renewable energy power generation plants.

news@theenergyreview.com