Government Electricity Arrears to Kenya Power Rise to KSh7.35 Billion

Kenya Power is facing growing unpaid electricity bills from government ministries, public institutions and county governments, with the outstanding balance reaching KSh7.35 billion by the end of June 2026.

According to reporting by Business Daily on 12 October, the arrears increased by 9.5 per cent from KSh6.71 billion in the previous financial year. The amount has risen steadily from KSh2.72 billion in 2022, highlighting a growing challenge in collecting payments from public-sector customers.

Unpaid bills add pressure to cash flow

The KSh7.35 billion owed by government entities represented 17.7 per cent of Kenya Power’s gross postpaid electricity receivables of KSh41.5 billion at the end of June 2026.

Delayed payments can affect the company’s cash flow because it must continue purchasing electricity, maintaining distribution infrastructure and financing network improvements even when some customers have not settled their bills.

The utility has said it is engaging the government and relevant entities to accelerate recovery of long-outstanding receivables.

Public services complicate enforcement

Kenya Power’s credit-control policy requires postpaid customers to settle bills within 21 days of billing. Enforcement measures can include payment arrangements, follow-ups, disconnection and legal recovery.

However, enforcing payment against public institutions can be complicated when facilities such as hospitals are involved, because electricity interruptions could affect essential services.

The situation therefore presents a challenge for both the utility and public institutions that must balance timely payment with continuity of service delivery.

Profitability and outstanding obligations

Despite the arrears, Kenya Power reported a net profit of KSh24.99 billion for the year ended June 2026, up 2.1 per cent. Revenue from electricity sales increased by 8.6 per cent to KSh238.24 billion.

The company also reported a separate KSh35.35 billion amount due from the government for recurrent losses under the Rural Electrification Scheme. That balance is distinct from the KSh7.35 billion in unpaid electricity consumption bills.

The growing arrears underline the importance of predictable public-sector payments for utilities. Faster settlement would help Kenya Power manage its finances while allowing government institutions to maintain essential services.