Unpaid Rural Electrification Bills Deepen Kenya Power’s Cash Strain

Kenya Power’s finances are under growing pressure after new audit findings showed the utility had accumulated heavy losses from running the government’s Rural Electrification Scheme (RES), with refunds from the State yet to be paid.

By June 2025, Kenya Power had recorded Sh19.4 billion in losses linked to the scheme, while total RES-related costs carried by the utility but not reimbursed stood at Sh34.49 billion. Auditor-General Nancy Gathungu says the scheme costs more to run and maintain than it earns, describing it as “sub-economic.”

Although the government had agreed to refund the losses, no payment had been made by June 30, 2025, despite a Cabinet decision to release Sh19.4 billion to clear the deficit.

The unpaid bill has continued to rise. The audit shows the Sh34.49 billion figure is a 12 percent increase from Sh30.73 billion a year earlier. On average, RES costs have grown by more than Sh4 billion over the past three years, rising from Sh26.9 billion in June 2023. With reimbursements delayed, pressure is building on how the losses will be handled.

This has sparked debate over whether consumers could end up paying more. The National Assembly’s Committee on Energy has urged the energy regulator, EPRA, to allow Kenya Power to pass some of the RES costs to electricity users. Lawmakers want the charges introduced from July and included in the next electricity tariff review, after concluding that the Treasury has failed to honour its refund commitments under the last-mile connectivity programme.

The RES problem is part of a bigger cash challenge at Kenya Power. The audit shows the utility was owed Sh98.4 billion as of June 2025. This includes Sh55 billion due from government agencies and Sh39 billion from other electricity customers. The growing unpaid bills highlight ongoing strain on Kenya Power’s balance sheet, even as it continues to deliver power to rural and low-income areas.