Electricity distributor Kenya Power has named the head of its procurement division, Mr Bernard Ngugi, as the chief executive officer effective immediately.
The appointment comes as the power monopoly looks to improve its financial position amid a streak of losses.
Mr Ngugi, an insider at the energy firm having served for more than three decades, takes over from Jared Othieno who has been the acting chief executive since July last year following the exit of CEO Ken Tarus.
Mr Tarus has been charged in court with conspiring to commit an economic crime and abuse of office.
He was charged alongside his predecessor, Ben Chumo, and a number of other senior managers of the power distributor. They have denied all the charges.
“We believe that Mr Ngugi will see the company through an important stage of its development and growth as we work to diligently implement all our plans to strengthen the Company and the commercial aspects of our business,” said Kenya Power chairman Mahboub Maalim in a statement.
TURNAROUND PLAN
Prior to his appointment to the top position, Mr Ngugi was the company’s general manager in charge of supply chain.
He says he would immediately seek to turn around the loss making State-run energy firm’s fortunes.
“My immediate focus is to lead the company towards improved profitability while ensuring the business fulfils its socio-economic purpose,” he said.
“This will be achieved by implementing our five-year strategic plan that broadly aims at delivering excellent customer service and ensuring our business sustainability.”
LOANS
The Nairobi Securities Exchange (NSE) listed firm has been left in a financial tight spot after it breached the terms attached to Sh59.6 billion worth of its loans.
Consequently, it has been seeking to secure fresh short-term loans to refinance similar debts on a longer tenor.
Early this year, mega electricity generation projects valued at billions of shillings were left in limbo after Kenya Power froze the signing of new power purchase agreements (PPAs) indefinitely, citing financial constraints and excess capacity.
The firm posted a 63.7 percent decline in net profit to Sh1.92 billion in the year ended June 2018 on higher costs.
Despite revenue rising by 4.23 percent to Sh125.8 billion on increased customer base, increased power purchase and higher finance costs depressed its bottom-line.
Power purchase costs, excluding fuel and foreign exchange, increased by Sh2.59 billion to Sh52.79 billion in the period.
Kenya Power said last November that it had opened talks with its creditors to extend the payment period for segments of its loan obligations maturing in the current financial year.