KPLC Warns Kenyans of a Huge Increase in Electricity Bills Over City Hall Standoff

In Summary:

• Kenya Power warns that if it pays Ksh63.8bn in wayleave charges for its distribution lines, electricity prices could jump by up to 30%—a cost likely to hit consumers.
• Nyati Sacco has filed a lawsuit against SASRA’s new guideline forcing immediate recognition of cash losses from KUSCCO investments. The sacco argues this could force members to write off recoverable funds.
• An Auditor General report reveals that thousands of acres of Kenya Prisons Service land have been illegally grabbed by government-linked individuals using fraudulent title deeds meant for farming and rehabilitation.
• Several Kenyan saccos are not fully booking losses from the KUSCCO fraud scandal, instead staggering provisions over years. This violates international financial reporting standards.
• Foreign investors have been net sellers on the NSE for five consecutive months, with February net sales hitting Ksh1.2bn and cumulative sales of Ksh4.8bn since October 2024. Local investors are stepping in, but large-cap stocks may face headwinds.
• Hospitals warn that the Social Health Insurance Fund (SHIF) could collapse within 12 months if urgent reforms aren’t made. Low funding and weak contributions from the informal sector are jeopardizing the fund’s sustainability.
• Investors only tendered 64.4% of Kenya’s Ksh116.2bn Eurobond buyback offer, leaving an unsold balance of about Ksh41bn. This undersubscription could increase refinancing burdens and riskier debt profiles.
• Over 18,000 county employees in 25 counties received less than one third of their basic salaries in the 2023-24 fiscal year due to excessive deductions from loans and new national levies, raising serious concerns over payroll management.

In a report by Nation, Kenya Power has warned that electricity prices could surge by up to 30% if it yields to county demands to pay wayleave charges for its distribution lines, which amount to Ksh63.8 billion—a cost likely to be passed on to consumers. The warning comes as Nairobi County retaliates by demanding Ksh4.9 billion in wayleave fees, aiming to delay a Ksh3.01 billion power bill. Although current power bills have eased thanks to a strong shilling, low fuel prices, and reduced reliance on thermal power, the imposition of these charges could reverse that trend, further squeezing households and businesses amid rising inflation. The utility cited the Energy Act 2019, which prohibits public entities from imposing wayleave fees without approval from the Cabinet Secretary for Energy. 

Nyati Sacco has filed a lawsuit challenging a guideline issued by the Sacco Societies Regulatory Authority (SASRA) on January 14, 2025, which mandates that saccos immediately recognize cash losses from investments in the scandal-hit Kenya Union of Savings & Credit Co-operatives (KUSCCO)—even though KUSCCO has not been declared insolvent by any court. The sacco, linked to G4S Kenya and having invested funds in KUSCCO maturing on April 30, 2024 (including Ksh690,005 in shares, Ksh4.1 million in Jungu Kuu Savings, and Ksh86.4 million in a special deposit), argues that the guideline risks forcing its members to write off recoverable investments. High Court Judge John Chigiti has ordered Nyati Sacco to serve the petition on SASRA and KUSCCO within seven days, with the case scheduled for May 7, while a PwC forensic audit has revealed widespread malpractices at KUSCCO as reported by the Business Daily.

In a report by the People Daily, an Auditor General report has revealed that thousands of acres of land belonging to the Kenya Prisons Service have been illegally grabbed by unscrupulous government-connected individuals, who secured fraudulent title deeds for properties originally earmarked for farming and rehabilitation programmes. The report details widespread encroachments across various prison facilities—including Kitale, Shimo la Tewa, Thika, Nakuru, Narok, Malindi, and Kisumu—with numerous parcels now embroiled in long-running court cases over ownership disputes. The scandal exposes deep-rooted corruption and exploitation within the management of prison lands, prompting the formation of an inter-ministerial committee involving the Ministry of Lands and the National Land Commission to reclaim the encroached properties, although progress remains slow.

Several Kenyan saccos are violating  international standards on financial reporting rules by not fully booking losses from the KUSCCO fraud scandal, instead opting to stagger provisions over multiple years as reported by Money254. This practice has drawn criticism from the Institute of Certified Public Accountants of Kenya, although SASRA defends the approach as necessary to avoid a run on deposits. Amid fraudulent activities at KUSCCO—where a PwC forensic audit uncovered manipulated financial records, theft, and bribery resulting in losses of Ksh13.3 billion. This left the umbrella body insolvent by Ksh12.5 billion and Ksh24.8 billion in deposits at risk. Saccos like Qona, Nyati, Sheria, and Mhasibu have made only partial provisions, while others including Stima, Kimisitu, Balozi, and Kenpipe have fully provisioned their exposures. The state has also instructed major saccos to lower dividend payouts to protect liquidity, raising concerns over the safeguarding of members’ funds.

Foreign investors have been net sellers on the Nairobi Securities Exchange (NSE)  for five consecutive months, with their February net sales reaching Ksh1.2 billion and cumulative sales totaling Ksh4.8 billion since October 2024. Year-to-date, they exited Ksh2.3 billion after net sales of Ksh1 billion in January, driven by global jitters and the protectionist policies of the new US administration. According to the Business Daily, despite this, the NSE has experienced a market recovery, with the Nairobi All Share Index returning 34% in 2024 and market capitalisation growing by 8.4% in the first two months of 2025—from Ksh1.9 trillion to Ksh2.1 trillion—as local investors increasingly raise their stakes, particularly in small-cap stocks, even as analysts warn that continued foreign exits may cap the performance of large-cap stocks.

Hospitals have warned that the Social Health Insurance Fund (SHIF) could collapse within 12 months if current challenges are not urgently addressed. Speaking before the Departmental Committee on Health, representatives from the Kenya Healthcare Federation, Rural Urban Private Hospital Association, and Kenya Association of Private Hospitals noted that inadequate funding—such as the capitation fee of only Ksh900 per family, compared to Ksh1,000 under the former NHIF—and low contributions from the informal sector (only about 4 million out of 20 million registered non-salaried Kenyans) are severely undermining the fund's sustainability. According to the People Daily, their concerns were raised amid calls from lawmakers for government transparency regarding the procurement of the controversial Ksh104.8 billion Social Health Authority system, which has further cast doubts on the fund’s management and long-term viability.

Investors tendered only 64.4% of Kenya’s Ksh116.2 billion Eurobond buyback offer, selling securities worth Ksh74.8 billion and leaving the government with an unsold balance of about Ksh41 billion to be serviced until maturity in 2027. According to the Business Daily, the buyback was intended to retire the entire bond early using proceeds from a newly issued Ksh193.7 billion Eurobond at 9.5% interest, with repayments scheduled in three equal tranches starting in May next year, to ease refinancing pressures and reduce other foreign debts. However, the undersubscription—and the higher annual interest costs on the new bond compared to the 2019 issue—signals increased refinancing burdens and a riskier debt profile, setting the stage for costlier and longer repayments as the Treasury continues to manage its external debt liabilities.

Over 18,000 county employees in 25 counties received less than one third of their basic salaries in the 2023-2024 financial year due to excessive deductions tied to loans and new national levies. The Auditor General’s report reveals that such deductions, which breach Section 19(3) of the Employment Act 2007, left many workers with net pay even below the minimum wage, with notable cases in Homa Bay, Nandi, and Nakuru, raising concerns about payroll management and the financial welfare of county workers as reported by the People Daily.