Source: https://energynewsafrica.com
Ghana: Veep Charges NPA To Implement Measures To Rake In More Revenue
The Vice President of Ghana, Dr. Mahamudu Bawumia, has charged the governing Board of the National Petroleum Authority (NPA) to support management to implement measures aimed at increasing revenue for the state.
The NPA was established by Act 2005, Act 691 to monitor and regulate petroleum prices by the prescribed pricing formula, grant licences to service providers and marketing companies, protect consumers’ interests and maintain the highest standards of petroleum products offered to them.
In a post on NPA’s Facebook and sighted by energynewsafrica.com, it said the Governing Board of the National Petroleum Authority, led by the Chairman, Mr Joe Addo-Yobo, called on the Vice President Dr. Mahamudu Bawumia at the Jubilee House on Tuesday, to brief the latter on matters such as steps taken to sanitise the downstream petroleum industry including digitisation in some aspects of the operations of the Authority and applying disciplinary sanctions to Oil Marketing Companies involved in illegalities among others.
“The Vice President commended the Board for their efforts and charged them to continue to implement measures aimed at increasing revenue for the state,” it said.
The NPA recently announced the creation of offices of deputy CEOs and appointed Mr. Perry Okudzeto and Mrs Linda Asante as the first deputy CEOs since the establishment of the Authority.
Source: https://energynewsafrica.com
Source: https://energynewsafrica.com
PURC Boss Presents Paper At The 2022 Commonwealth Science Conference In Accra
The Executive Secretary of the Public Utilities Regulatory Commission (PURC), Dr. Ishmael Ackah, on Monday, 14th March 2022, presented a paper at a three-day Commonwealth Science Conference, Sub-Sahara Africa Follow-on Meeting held in Accra, capital of Ghana.
The 3-day conference, which took place from 14th-16 of March 2022, was held at the Academy of Arts and Sciences at which programme , the Executive Secretary of the Commission presented a paper on the ‘Political Economy of the Energy Transition’.
The Energy Economist, in his presentation, hinted that Africa’s energy apart from South Africa, the continent of Africa’s energy mix is dominated by hydro technology.
He also noted that economies such as Nigeria and Angola are structured around the oil and gas industry , with oil contributing to about 70 per cent of government revenues in Angola.
He emphasised that petroleum revenues have been used for investments, social interventions and debt repayment.
For instance, oil revenues in Ghana contribute substantially to the Free Senior High School Initiative which was rolled by the Government as part of the human capital development strategy.
He pointed out that, approximately 730million people in Sub-Saharan Africa rely on the traditional use of solid biomass, mainly fuelwood, charcoal and dung for cooking, typically with inefficient stoves or simple three-stone fires, in poorly ventilated spaced.
He was quick to add that transition implies diversified and competitively priced energy sources which will address the continent’s need for industrialisation and access in an environmentally sustainable manner.
In his view, there should be research, capital injection, resource base and good governance to achieve this.
Referring to 2021 UNESCO report, he indicated that Africa’s gross expenditure on research as a proportion of GDP averages 0.5 per cent compared to the world average of 2.2 per cent. There is no known country in Africa that is spending one per cent of its GDP on research.
Dr. Ackah said in his presentation that while some Sub-Saharan African countries lack reliable electricity infrastructure, there is a potential opportunity to develop this infrastructure in a more sustainable way other than countries have done in the past through a move towards national electrification.
He said countries that can provide, carbon free generation could benefit from abundant solar and wind resources.
He noted that these can be financed investing in cost-reducing technologies, adopting a pay-as-you-go arrangement to help spread upfront cost of renewable energy technologies, structuring payments for new renewable energy technologies so that they are similar to costs of the energy sources they are replacing.
Additionally, collaborative investments, with the active engagement of local investments as well as alternative financing sources such as bonds, enhanced refinancing opportunities could all be considered.
In the area of governance, Dr Ackah stated that setting in place right regulatory policies and institutional frameworks can lead to unbundling electricity service provision and the opening up of competition in the sector.
Setting multi-year tariffs with adjustment clauses, clear renewable energy targets, which align with climate and sustainability targets, together with a clear and transparent procurement processes will all aid in providing a transparent and accountable governance process.
The provision of information through public education , dissemination of research findings and strengthening of technical capacity to build domestic innovative capabilities, including skills set for installing, maintaining and repairing renewable energy technologies, and engaging with local communities including women, in training and maintenance of these systems will go a long way in transitioning energy divide.
He intimated that the natural gas is a good transbridger fuel. In his estimation gas is a clean source of energy and a good complement to renewables.
Natural gas can support the economic transformation of the continent through chemical production, fertilizer manufacturing, cement, and clean cooking fuels. Thus, leaving natural gas on the ground will just delay or deny Africa’s chance of industrialising.
Dr. Ackah concluded by saying tat Africa needs to be part of the value chain and not a mere consumer of technologies.
Source: https://energynewsafrica.com
He also noted that economies such as Nigeria and Angola are structured around the oil and gas industry , with oil contributing to about 70 per cent of government revenues in Angola.
He emphasised that petroleum revenues have been used for investments, social interventions and debt repayment.
For instance, oil revenues in Ghana contribute substantially to the Free Senior High School Initiative which was rolled by the Government as part of the human capital development strategy.
He pointed out that, approximately 730million people in Sub-Saharan Africa rely on the traditional use of solid biomass, mainly fuelwood, charcoal and dung for cooking, typically with inefficient stoves or simple three-stone fires, in poorly ventilated spaced.
He was quick to add that transition implies diversified and competitively priced energy sources which will address the continent’s need for industrialisation and access in an environmentally sustainable manner.
In his view, there should be research, capital injection, resource base and good governance to achieve this.
Referring to 2021 UNESCO report, he indicated that Africa’s gross expenditure on research as a proportion of GDP averages 0.5 per cent compared to the world average of 2.2 per cent. There is no known country in Africa that is spending one per cent of its GDP on research.
Dr. Ackah said in his presentation that while some Sub-Saharan African countries lack reliable electricity infrastructure, there is a potential opportunity to develop this infrastructure in a more sustainable way other than countries have done in the past through a move towards national electrification.
He said countries that can provide, carbon free generation could benefit from abundant solar and wind resources.
He noted that these can be financed investing in cost-reducing technologies, adopting a pay-as-you-go arrangement to help spread upfront cost of renewable energy technologies, structuring payments for new renewable energy technologies so that they are similar to costs of the energy sources they are replacing.
Additionally, collaborative investments, with the active engagement of local investments as well as alternative financing sources such as bonds, enhanced refinancing opportunities could all be considered.
In the area of governance, Dr Ackah stated that setting in place right regulatory policies and institutional frameworks can lead to unbundling electricity service provision and the opening up of competition in the sector.
Setting multi-year tariffs with adjustment clauses, clear renewable energy targets, which align with climate and sustainability targets, together with a clear and transparent procurement processes will all aid in providing a transparent and accountable governance process.
The provision of information through public education , dissemination of research findings and strengthening of technical capacity to build domestic innovative capabilities, including skills set for installing, maintaining and repairing renewable energy technologies, and engaging with local communities including women, in training and maintenance of these systems will go a long way in transitioning energy divide.
He intimated that the natural gas is a good transbridger fuel. In his estimation gas is a clean source of energy and a good complement to renewables.
Natural gas can support the economic transformation of the continent through chemical production, fertilizer manufacturing, cement, and clean cooking fuels. Thus, leaving natural gas on the ground will just delay or deny Africa’s chance of industrialising.
Dr. Ackah concluded by saying tat Africa needs to be part of the value chain and not a mere consumer of technologies.
Source: https://energynewsafrica.com
NGOs Threaten To Sue TotalEnergies If It Doesn’t Exit Russia
Greenpeace France and the local chapter of Friends of the Earth have threatened TotalEnergies with a lawsuit if the supermajor does not pull out from Russia, Reuters has reported, citing a letter by the two non-governmental organizations to TotalEnergies’ chief executive.
The organizations said in their letter that under French criminal law, corporate executives could be held responsible for their companies’ involvement with countries participating in armed conflict, which, according to the two, can constitute complicity in war crimes and crimes against humanity.
“We hereby formally request that you … put an end without delay to your activities connected with the Russian oil and gas market in order to cease any business relationships that may contribute to the commission of serious violations of human rights,” Greenpeace France and Friends of the Earth France wrote.
Two weeks ago, the French supermajor said it would suspend any new investment in Russian energy, but would not exit the country.
TotalEnergies has a 19.4-percent stake in Novatek, the country’s largest private producer of liquefied natural gas. As of 2020, its Russian assets accounted for 24 percent of TotalEnergies’ proven reserves and 17 percent of its oil and gas production, according to Reuters.
“TotalEnergies supports the scope and strength of the sanctions put in place by Europe and will implement them regardless of the consequences (currently being assessed) on its activities in Russia,” the company said in late February.
Before Greenpeace and Friends of the Earth began to exert pressure, an activist shareholder did the same. Clearway Capital last week called on the French company to pull out of Russia, threatening it with a shareholder vote if it refuses to do so.
“We believe there to be a groundswell of support among the company’s shareholder base for decisive action from TotalEnergies,” the founder of Clearway Capital, Gianluca Ferrari, told Reuters.
Source: Oilprice.com
Ghana: Petrol, Diesel To Sell Between GH¢10 & GH¢12 Per Litre
Fuel prices in the Republic of Ghana are likely to cross GH¢9 ($1.25 )per litre in the second pricing window which takes effect from Wednesday, March 16, 2022.
Currently, a litre of both gasoline (petrol) and diesel (gasoil) are sold between GH¢8.22 and GH¢8.50 per litre.
Crude oil prices jumped to a record high on March 7, 2022, with West Texas Intermediate WTI trading at $126 while International Benchmark Brent sold $130 per barrel on the back of the Russian invasion of Ukraine.
Shockingly, as of Tuesday, both WTI and Brent nosedived to $96.44 per barrel and $98.47 respectively.
Ahead of the second pricing window which begins tomorrow (Wednesday), the Association of Oil Marketing Companies (OMCs) in the Republic of Ghana is projecting that a litre of petrol and diesel could be sold between GH¢10 and GH¢12.77.
In a document intercepted by energynewsafrica.com which presents several scenarios, the AOMCs observed that both petrol and diesel could be sold between GH¢10.43 and GH¢12.77 while LPG is likely to sell between GH¢9.88 per kilo and GH¢11.44 per kilo.
Consumers have been lamenting over the rising cost of fuel on the local market.
While some Ghanaians are blaming the government for the incessant increment in fuel prices due to the taxes on the commodity, others believe the government cannot be blamed since crude prices are going up on the international market.
Source: https://energynewsafrica.com
Source: https://energynewsafrica.com Ghana: Tullow Plans To Drill Six New Wells In 2022
Tullow Oil plc. has announced drilling about six new wells in Ghana’s offshore oilfield this year.
Per its 2022 outlook, Tullow said it plans to drill three new wells at the Jubilee and three new wells including two strategic wells, at the TEN fields to further define future development plans, as well as investment in infrastructure for the undeveloped Jubilee South-East and North-East areas.
Tullow said it expects to secure a gas commercialisation agreement in Ghana which will come into effect once all foundation gas volumes have been delivered.
Although Tullow did not give a specific month to achieve this, it is anticipated that it would occur before the end of the year.
The oil firm has pegged $350 million for capital expenditure for the year 2022.
Out of this figure, it has allocated $270 million for development in Ghana, $30 million for non-operated portfolios, $5 million in Kenya and $45 million for exploration activities.
Tullow is also aiming to self-operate the Jubilee FPSO from mid-2022 onwards, following the scheduled end of the contract with MODEC.
It is hoped that this would enable the Group to realise further efficiency improvements and cost savings.
“Work plan is in place to progress towards Net Zero target, focusing on gas compression facilities on the Jubilee FPSO,” it said.
The company recently signed an MOU with the Ghana Forestry Commission to identify and develop nature-based carbon offset projects in Ghana to offset hard to abate residual emissions.
Ghana: GOIL Supports Appiatse Explosion Victims
Ghana’s leading indigenous oil marketing company, GOIL Company Limited, has donated quantities of food items and clothing to victims of the Appiatse explosion disaster near Bogoso in the Western Region.
The donation was to assist inhabitants of the community to alleviate their current difficulties, following the recent disaster that resulted in the death of scores of residents.
The items included assorted clothing, food items, detergents and toiletries and educational materials.
Presenting the items, the Head of Administration and Human Resource of GOIL, Mr Martin Olu-Davies expressed GOIL’s sympathies to the community.
He noted that as a responsible Oil Marketing Company operating near the community, it was important to assist the people in their moment of dire need.
The support, he explained, was part of the company’s social intervention strategy to needy communities.
The Municipal Chief Executive of Prestea-Huni Valley, Dr Joseph Dasmani, who received the items, together with NADMO officials, expressed gratitude to GOIL for the donation, which he described as big and timely.
Present at the brief ceremony was GOIL’s Public Relations Manager, Robert Kyere, Baaba Martin-Daniels, Zonal Manager, West of GOIL and the Nana Atta- Kojo Brembi II, the Divisional Chief of the area.
Nigeria: Blackout As National Grid Collapses Second Time In 2022
Nigeria’s national electricity grid has collapsed for the second time in 2022, resulting in blackout across the West African nation.
The grid, which collapsed on Monday, March 14, 2022, has affected many states including Lagos, Enugu, Kaduna, Abia, Anambra, Ebonyi, Enugu and Imo.
Some power distribution companies reached out to their customers by text message to confirm the development.
“Dear esteemed customer, a system collapse occurred on the national grid at 10:40 am today, leading to outages across our network.
“We are working on the situation with our TCN partners and will keep you updated.We sincerely apologise for the inconvenience this may have caused,’’ Eko Electricity Distribution Company said in a text message to customers.
Another disco, Kaduna Electricity Distribution Company, which confirmed the incident to its customer via text message, said: “We regret to inform you that the power outage being experienced in our franchise states is due to system collapse of the national grid which occurred at about 10:40 am.
“Power supply shall be restored as soon as the national grid is powered back. Our sincere apologies for any inconvenience,” the text message concluded.
On its part, the Enugu Electricity Distribution PLC said that the system collapse has affected supply in Abia, Anambra, Ebonyi, Enugu and the Imo States.
The notice signed by EEDC Head, Corporate Communications, Emeka Ezeh, read: “The Enugu Electricity Distribution PLC (EEDC) wishes to inform her esteemed customers in the South-East of a general system collapse which occurred this morning, Monday, 14th March 2022 at 10:40 am.
“This is the reason for the loss of supply currently being experienced across the network.
“Consequently, all our outgoing feeders are out and supply to our customers in Abia, Anambra, Ebonyi, Enugu and the Imo States are affected by this development.”
Some residents who shared their frustration to energynewsafrica.com via WhatsApp said they have been compelled by the circumstances to use gensets.
At the time of filing this report, the grid had still not been restored.
Source: https://energynewsafrica.com
US Gas Exports Can ‘Easily’ Replace Russian—Says Toby Rice
The global energy market has been suddenly upended by Russia’s invasion of Ukraine, but one energy boss says the US could step in and help shore up global supplies.
Toby Rice, who runs the US largest natural gas producer EQT, told the BBC the US could easily replace Russian supply.
“We’ve got the ability to do more, the desire to do more,” Mr Rice said.
He estimated the US has the potential to quadruple its gas output by 2030.
Mr Rice’s declaration that American companies could play a bigger role in providing gas to Europe, comes less than a week after US Energy Secretary Jennifer Granholm urged the country’s fuel industry to pump more oil.
“We are on a war footing”, Ms Granholm said. “That means you producing more right now, where and if you can.”
Twice over the past decade, shale producers have unleashed more supply in response to higher prices, drilling so much that prices crashed and many went bankrupt.
Mr Rice explained that today the industry is more cautious: “It’s got to be demand first and not just chasing short term price signal.”
And Pittsburg-based EQT might be able to increase output. But without more pipelines, it can’t send the gas where it’s needed most.
Another obstacle to US ambitions to export more liquefied natural gas is a shortage of export facilities. US terminals are shipping close to all the gas they can.
Before natural gas can be shipped overseas, it needs to go to a special facility where it is cooled to below minus 260 degrees Fahrenheit, turning it to a liquid. Then it can be loaded onto cargo ships.
There are currently eight terminals operating in the United States, with 14 more projects approved for construction.
Mr Rice said political opposition to building pipelines and export facilities – partially driven by environmental concerns – is primarily preventing his industry from helping Europe end its reliance on Russian gas.
Mr Rice called on the Biden administration to streamline the process for getting pipeline projects approved.
He’s looking for a “signal this administration recognizes the American oil and gas industry as a strategic powerhouse.”
Given the Biden administration’s desire to help its allies with its energy problems and oppose Russian aggression, Mr Rice may get what he wants, with US Energy Secretary Granholm saying to oil and gas producers:
“I’m here to extend a hand of partnership.”
Source: BBC
Nigeria: Two Jailed Over 10 Years For Diverting $11 Belonging To Kaduna Electric
Two staff of QXK Engineering Services, a company that provides services to the Kaduna Electricity Distribution Company in Nigeria, have been sentenced to over ten years imprisonment for diverting money belonging to Kaduna Electric.
The convicts are Ibrahim Yakubu and Umar Salihu.
The convicts allegedly conspired and received N5000 ($11.92) belonging to the Kaduna Electricity Distribution Company and diverted the money.
According to a statement posted by Kaduna Electric, the convicts were arraigned before the Argungu Magistrates Court and pleaded guilty to the offences.
The statement said the court ruled that the suspects committed the offences of criminal conspiracy, breach of trust and cheating contrary to sections 60, 298 and 308 of the Penal Code of Kebbi State 2021.
The two were sentenced to three months imprisonment or the option of a ten thousand naira fine for the offence of criminal conspiracy.
For the offence of Breach of Trust, they were sentenced to five years imprisonment or the option of fifty thousand Naira fine.
Similarly, for cheating, the accused were sentenced to four years in prison or option of forty thousand naira fine respectively
Source: https://energynewsafrica.com
Nigeria: Duport Modular Refinery Ready End Of March– NCDMB Boss
The Nigerian Content Development and Monitoring Board (NCDMB) has hinted that the Duport Modular Refinery will be ready for commissioning by the end of March 2022.
The refinery is financed with equity participation by NCDMB.
The Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote, gave the hint after he undertook an assessment visit and participated in the 1st quarter board meeting of the directors at Duport Energy Park in Egbokor, Edo state, on Wednesday.
Wabote further hinted that the Duport Energy Park is the first integrated energy park in Nigeria, with a 2,500 barrels refinery, CNG Gas processing plant, 10 megawatts power plant, and a world-class data center.
He described the progress made by the project as impressive, considering the various challenges posed by COVID-19, travel restrictions and other issues.
On his part, the Managing Director of Midstream Company Limited, Dr. Akintoye Akindele appreciated the NCDMB for its continuous partnership.
He said: “NCDMB has been a big part of Duport’s success story. It takes more than finance but also advice, technical and commercial to build a novel and unique project.”
He further stated that Duport Energy Park will refine crude oil into naphtha, AGO, otherwise known as diesel, Heavy Fuel Oil and DPK, known popularly as kerosine as well process gas to CNG, LPG and LNG, adding that the facility is the second firm in Nigeria to acquire a tier-4 data center license.
Dr. Olatutu Sholeye, a member of the Board of Directors, expressed delight at the work done, adding that it had created employment opportunities and built capacities among the teeming youth in the community.
She mentioned that energy is key to the growth of every sector of the economy in Nigeria.
Source: https://energynewsafrica.com
Source: https://energynewsafrica.com Tunisia: AMEA Power To Build 100 MW Solar Power Plant In Kairouan Under PPP
UAE-based independent power producer (IPP) AMEA Power has signed the concession agreement and power purchase agreement (PPA) for the construction of a 100 MWp solar photovoltaic plant in Tunisia.
The plant will be located in the governorate of Kairouan in the center of the country.
“This is a great step for Tunisia and AMEA Power. As part of the government’s Vision 2030 for new energies, Tunisia aims to increase the share of renewable energy in its energy mix to 30% by 2030, which corresponds to an additional installed capacity of about 4 GW,” says Hussain Al Nowais, President of AMEA Power.
The future solar photovoltaic power plant in Kairouan will have a capacity of 100 MWp, or an expected annual output of 223,171 MWh.
The IPP estimates that its clean energy plant will allow Tunisia to avoid 113,525 metric tons of CO2 emissions on an annual basis. In keeping with the spirit of this type of public-private partnership (PPP) project, the electricity produced will be sold to the Société tunisienne d’électricité et du gaz (STEG).
AMEA Power was awarded the concession under an international bidding program launched by the Tunisian Ministry of Industry and SMEs (small and medium-sized enterprises) in 2018. IPP responded to the tender in a consortium with Chinese company Xinjiang New Energy. The two partners plan to start work in late 2022.
This project will support the energy transition desired by the Tunisian authorities. Tunis has also recently committed to implementing a policy aimed at reducing its dependence on gas for electricity production, in a global context marked by rising prices for this fossil fuel. The Tunisian government wants to carry out administrative reforms to develop an installed solar capacity of 3.8 GW by 2030
Ghana:NEDCo Loses GH¢8.5 Million Monthly To Criminal Activities By Tamale Residents
Criminal activities by some residents of Tamale in the Northern Region of Ghana is making the Northern Electricity Distribution Company (NEDCo) lose GH¢8.5 million every month.
The power distribution company, which supplies electricity to Tamale, Techiman, Wa, Bolgatanga and Sunyani, has been losing 45 per cent of power supplied in the Tamale Metropolis through power theft, popularly known as illegal connection by the residents.
“Look, we’re losing GH¢8.5 million in Tamale alone every month. We provide services in Bolgatanga, Wa, Techiman, etc but none of these is happening in the other locations,” Mr William Kwame Asare, Chairman of Senior Staff Association of NEDCo, said in a telephone interview with energynewsafrica.com.
The staff of NEDCo and VRA are currently on strike over attacks on them by some residents who have been engaging in power theft in Tamale.
Mr Asare told energynewsafrica.com that residents of Tamale are always ready to welcome the staff of NEDCo to their homes to attend to faults and other electrical problems but said anytime the staff went into the town to undertake revenue mobilization exercise, they were beaten and assaulted.
He recounted that on Tuesday, March 8, 2022, a group of staff including casuals, went out on a disconnection exercise at Koblimagua, a suburb of Tamale, and one casual staff, Mr Leban Bani Issah, was attacked with cutlasses as well as machetes and was nearly killed by some residents after disconnecting a house for power theft.
He said the staff sustained cutlass wounds and bled profusely as a result of the assault.
According to him, the victim is currently on admission but is responding to treatment.
He continued that Edmond Dakura, a staff with the Loss Control Unit, was assaulted and his mobile phone was seized while on a routine monitoring exercise at Gambini, a suburb of Tamale.
This, Mr Asare explained, occurred while the victim was disconnecting a customer for an illegal connection.
He further recounted that the Loss Control team was attacked at Gbolo Kpatsi, a suburb of Tamale when they attempted to disconnect a customer who had reconnected himself after being disconnected for an illegal connection.
“The staff had to run and to also save the vehicle from being vandalized,” he narrated.
Then on February 22, 2022, Abdul Washie, a staff with the Electrical Maintenance team, was attacked and assaulted by a mob at Gbolo Kpatsi while carrying out troubleshooting to repair a fault.
He said these attacks and many other intolerant actions of the residents have made their routine exercise very risky and would, therefore, not go out to risk their lives.
In a statement, the Management of NEDCo described the actions of the Tamale residents as regrettable and called on the public to support to fight the canker.
Source: https://energynewsafrica.com
Kenya Power Reports US$33.4 Million In Half-Year 2021
Kenya Power has reported an Sh3.82 billion ($33,450,087.47) profit after tax for the half-year to December 31, as the company cements its way back into profitability.
This is compared to Sh138 million ($1,208,406.30) posted in a similar period in 2020.
Profit before tax for the period under review was Sh5.66 billion, compared to Sh332 ($2,907,180.38) million realised in a similar period the previous year.
Management has attributed the stellar performance to an increase in sales, enhanced system efficiency and lower operating costs.
Electricity sales recorded a 366GWh increase to 4,562GWh, an 8.7 per cent growth compared to a similar period in 2020.
“This was driven by an increase in customer connectivity, as well as improved supply quality and reliability due to enhanced preventive maintenance works, network refurbishment, and accelerated faulty meter replacements,” management said in a press statement.
This, combined with a 2.33 per cent improvement in system efficiency, which stood at 77.13 per cent as of December 31, 2021, led to a 12.9 per cent increase in electricity revenue which grew to Sh69.447 billion.
Operating costs decreased from Sh20.1 billion to Sh19 billion as a result of enhanced cost management and resource optimization initiatives that the company is implementing as part of its turnaround strategy, it said.
The electricity distributor bounced back to profitability last year after a series of losses.
It reported Sh1.5 billion in net earnings for the year ended June 30, compared to an Sh939 million loss last year.
In the half-year to December, non-fuel power purchase costs increased from Sh38.123 billion incurred in the previous period to Sh40.487 billion mainly due to additional unit purchases to support increased demand.
Similarly, fuel costs increased from Sh4.618 billion to Sh10.871 billion mainly due to a 314 GWh increase in units purchased from thermal plants to 709 GWh due to low hydrology resulting from delayed rains, and an upsurge in fuel prices.
Finance costs increased to Sh6.8 billion from Sh6.601 billion the previous period, mainly due to a rise in unrealised foreign exchange loss resulting from the depreciation of the Kenya shilling against major currencies.
Overdue customer debt, for the first time in five years, recorded a reduction of Sh900 million as a result of enhanced field presence, continued government intervention with state agencies, and increased customer engagements, it said.
“In the second half of the year, the business will primarily focus on domestic and SME customers who currently account for 67 per cent of the company’s outstanding debt,” management has affirmed.
It said the company continues to roll out a proactive strategy to enhance its cash position which is premised on the prioritisation of payments of outstanding obligations.
As a consequence, the company reduced trade and other payables by over Sh4 billion.
In addition, the business cleared overdrafts amounting to Sh3.6 billion.
Further to this, the company closed the first half of the financial year with a cash position of Sh8.347 billion which includes ring-fenced funds projects, receipts from the government for the Last Mile, and street lighting programmes, as well as funds for scheduled loan repayments.
“As Kenya Power marks a century of service to Kenyans, the Company is using this opportunity to take stock of the state of its business which is operating in a highly dynamic and complex environment, whilst laying the foundation for its future,” management said.
As a consequence, the business is at the height of concerted reforms aimed at enhancing its ability to deliver on its core mandate, by making it more efficient, agile and customer-led, it added.
Source: https://energynewsafrica.com