ya Power accrued Sh19.4 billion in losses from implementing the government’s Rural Electrification Scheme (RES) by June 2025, new details show amid plans to pass the costs to consumers through power bills.
The loss was part of the Sh34.49 billion costs the company had accrued while implementing the RES on behalf of the national government, though the Ministry of Energy has been slow at making refunds, a new audit shows.
Kenya Power has been implementing RES to ensure electricity connections to poor households, with the agreement that the State refunds its costs involved in the connections, leading to a surge in losses since the project has not been economically viable.
In a report for the company for the year ending June 2025, Auditor-General Nancy Gathungu reckons that the Ministry of Energy owed Kenya Power upwards of Sh34.49 billion in costs incurred in the RES by the end of June last year.
“The Schemes of RES are considered sub-economic, given that their operational and maintenance costs exceed their revenues, and it was agreed that the government will reimburse the company any deficit arising from the scheme,” Ms Gathungu says.
“As at June 30, 2025, no reimbursement had been made to cover the deficits despite a Cabinet resolution to disburse Sh19.4 billion to settle the RES losses,” she adds.
The Sh34.49 billion was a 12 percent increase from the Sh30.73 billion costs accumulated by the end of the previous fiscal year, the audit shows.
RES costs have been rising by over Sh4 billion on average over the past three years, up from Sh26.9 billion by June 2023.
MPs late last year intensified the push to have electricity consumers cover the programme’s costs, asking the Energy and Petroleum Regulatory Authority (Epra) to introduce pass-through costs starting July this year, to help Kenya Power recover the billions it has spent on the programme.
“Within six months upon adoption of this report, Epra institutes a review of pass-through costs to introduce a recovery mechanism for the operating deficits for RES, and that in the next tariff control period, the same be factored into the base tariff,” said the National Assembly’s Committee on Energy.
The committee’s position came in the wake of a realisation that Treasury had failed to honour an agreement requiring it to reimburse Kenya Power costs for the last-mile programme.
The Sh34.49 billion RES programme costs and losses were listed as part of debts owed to Kenya Power, which totalled Sh98.4 billion as of June 2025. The audit noted that the company was owed Sh55 billion by government entities and Sh39 billion by other electricity customers.
Kenya Power made provisions to the tune of Sh21.13 billion during the year. The company generated Sh2.37 billion in revenues from the customers connected under the RES out of the total revenues of Sh219.28 billion during the year.
