MPs Grill Kenya Power CEO Over Increased Electricity Prices, Ksh71B Debt

Hello and welcome to the Money News Roundup Newsletter, where we are covering Kenya Power CEO's explanation on the rising cost of electricity, as well as the upcoming free ambulance service by the government.

Kenya Power CEO Says Electricity Price is Cost-Reflective

Joseph Siror, the CEO of Kenya Power, which trades under the KPLC ticker on the Nairobi Securities Exchange, explained that electricity prices are cost-reflective, meaning they are directly tied to the return on equity to guarantee that infrastructure financiers receive their returns on investment.

Siror was appearing before the Public Investments Committee on Energy on Wednesday, where he was hard-pressed on the high cost of electricity.

The CEO defended the current pricing model as “cost-reflective,” saying it’s designed to attract investment in power generation. The pricing is determined by the Energy and Petroleum Regulatory Authority (EPRA).

“For any power plant, we apply an open-book model: 25% equity and 75% debt, targeting a 12% return on investment. EPRA reviews and approves all tariffs based on plant costs and operational years,” he explained.

“The older Power Purchase Agreements (PPAs) are actually more expensive and the reasons, of course, are the issue of technology and others. The main rationale on that (high price) is actually the return on investment. Power projects are actually very expensive. To sink one megawatt of geothermal costs $600 million. When a financier is agreeing to finance, he needs to have a guarantee that he will actually be able to recoup those resources—and that is what is inbuilt into the tariff.”

Catch Up Quick: In April, Money254 reported that the number of tokens received in that month were less than those purchased a month earlier for the same amount.

For instance, in March, if one bought tokens worth Ksh300, they would receive 11.9 tokens. However, a similar amount in April would only fetch 11.4 tokens. A bigger percentage of the charges ended up going to fuel and forex adjustments.

Kenya Power Debt: Ksh71 Billion Hole

Siror was also put to task over the utility firm's financial crisis after a report by the Auditor General for the year ending June 30, 2019, showed that the company’s current liabilities stood at Ksh115.2 billion against assets of Ksh44.2 billion—leaving a negative working capital of Ksh71 billion.

He attributed the financial crisis to capital-intensive projects implemented between 2014 and 2018 under the government’s universal electrification agenda and the ambitious 5,000MW power generation plan.

“Most of the funding came from medium-term commercial loans, yet the projects we undertook were long-term in nature. Delays in tariff reviews and high system losses only worsened the cash flow situation.”

“We’re making progress. Our negative working capital has improved from Ksh75 billion in 2020 to Ksh27 billion in 2024. We also posted a Ksh30 billion profit after tax as of June 2024,” Siror added.

In Contrast: Last week, the company announced that its share value had surged by 750% since July 2023.

"Kenya Power’s share price has recorded a remarkable 750% growth over the past 18 months—rising from Ksh1.32 in December 2023 to Ksh11.10 as of yesterday, 26th June 2025. This rally reflects renewed investor confidence, driven by the company’s strong financial performance, expanding connectivity, a stable grid, and improving system efficiency," the company revealed.

Beneficiaries of the Surge: This surge in share price swelled the pockets of Kenya Power investors—among them Kiharu MP Ndindi Nyoro, who confirmed that his Ksh56 million investment had earned him a profit of Ksh244 million in just four years.

Here are other top business stories this morning;

Health CS Says Free Ambulance Service for All to Launch in October

Health Cabinet Secretary Aden Duale on Wednesday night revealed that the government is preparing to roll out a free ambulance service for all Kenyans.

While appearing on JKLive, he noted that the service will be accessible via a mobile application by anyone in distress—regardless of location or time.

Duale said, "We are introducing a very good ambulance system where, by October, Kenyans will use an app (just like a taxi-hailing app). You check in our system for the ambulance nearest to you, call it, and it takes you to hospital free of charge—paid by the people of Kenya. It is called the Emergency Chronic and Critical Illness Fund, and it is budgeted for by Parliament."

It remains unclear whether the service will be exclusive to individuals registered under the Social Health Authority (SHA).

Govt Suspends Sugar Milling in Western Kenya Over Cane Shortage

The government has suspended sugarcane milling in the upper and lower Western regions for three months starting July 14, 2025, due to an acute shortage of mature cane. According to a report by Capital Business, the affected factories include Nzoia Sugar, Busia Sugar Industry, West Kenya’s Naitiri and Olepito units, Butali Sugar Mills, and Mumias Sugar. Acting Kenya Sugar Board CEO Jude Chesire noted that the shortage has forced millers to harvest immature cane, resulting in lower yields and financial losses for farmers.

In a letter addressed to Agriculture CS Mutahi Kagwe, Chesire explained that the shutdown will allow time for a Cane Availability Survey to be conducted within two months. The findings will inform the appropriate milling capacity for each factory once operations resume. Millers have also been directed to scale up cane development efforts to ensure a more sustainable supply in the future.

KAA Announces Major Overhaul Plans for JKIA Infrastructure

The Kenya Airports Authority (KAA) has unveiled a series of reforms aimed at modernising Jomo Kenyatta International Airport (JKIA) and positioning it as a competitive global hub. According to Kenyans.co.ke, the announcement was made following a high-level meeting on July 9 with ground handling agents, KAA Board Chairman Caleb Kositany, and Acting Managing Director Dr. Mohamud Gedi. Key priorities include urgent upgrades to runways, airside access roads, and the baggage handling system. KAA also pledged to fund these improvements internally as part of the government's wider airport modernisation strategy.

The reforms come in the wake of public backlash and eventual cancellation of a controversial management deal with India’s Adani Group in 2024. In response, the government has shifted focus to internal development and restoring public trust. Transport CS Davis Chirchir confirmed that the government aims to break ground on JKIA’s redevelopment before the end of 2025. Recent investments such as a modern aircraft recovery system further signal renewed efforts to enhance airport operations.

Kenya Cuts China Loan Repayments by Ksh23.3 Billion

Kenya’s cost of servicing loans from China dropped by Ksh23.33 billion in the financial year ending June 30, 2025. The decline was driven by a stable shilling and falling global interest rates, helping ease pressure on government finances amid ongoing revenue shortfalls, per Business Daily.

Treasury data shows that Kenya paid Chinese lenders Ksh129.35 billion, down from Ksh152.69 billion the previous year. Payments towards principal fell by 11.80% to Ksh88.61 billion, while interest obligations dropped by 21.99%. This marks the first drop in repayments to Beijing since the 2020/21 financial year.

Kenyan Bank Loses Ksh517M in IT Security Breach

A Kenyan bank lost Ksh517 million after contractors compromised its IT security system, enabling unauthorized wallet creation and laundering of funds through cryptocurrency. According to a report by Business Daily, the fraud was linked to altered card systems by rogue service providers.

Kenya’s Financial Reporting Centre (FRC) revealed the incident as part of a wider trend in rising cybercrime cases. The report, which tracked over 14,000 suspicious transactions between 2020 and 2023, did not disclose the name of the bank or the contractor involved.