End of an era as the Njoroges exit top energy firms
KenGen’s Eddy Njoroge and Kenya Power’s Joseph Njoroge’s exit opens the race for two of the most coveted parastatal jobs. FILE/BD Graphics
What you need to know:
Joseph Njoroge of Kenya Power was sworn in as the Energy principal secretary Thursday while KenGen’s Eddy Njoroge is retiring to build his boardroom career and pursue further studies.
The Njoroges are leaving the State-owned corporations midway through their latest contracts and have been replaced by insiders in acting capacities.
Kenya’s energy sector is bidding farewell to two of its most influential executives who have determined the industry’s fortunes in the past 10 years.
Joseph Njoroge of Kenya Power was sworn in as the Energy principal secretary Thursday while KenGen’s Eddy Njoroge is retiring to build his boardroom career and pursue further studies.
The Njoroges are leaving the State-owned corporations midway through their latest contracts and have been replaced by insiders in acting capacities.
Kenya Power, the monopoly electricity distributor, has appointed its chief manager Ben Chumo the acting chief executive while KenGen, which produces 70 per cent of all electricity consumed in the country, has appointed its director of regulatory affairs Simon Ngure to hold brief as the board searches for a new chief executive.
The Njoroges have enjoyed close links with the current and previous administrations and are expected to remain influential players in the corridors of power in the Uhuru Kenyatta government.
Political interest is expected to determine who replaces the blue-eyed boys in the two offices considered among the most plum in the public sector.
Managing KenGen or Kenya Power gives one control of multi-billion-shilling contracts and two of the country’s largest corporations that generated combined sales of Sh62.4 billion with net profits of Sh7.4 billion last year.
As the Energy Principal Secretary, Joseph Njoroge will play a significant role in the appointment of his successor at Kenya Power where he leaves behind a chequered legacy of success, challenges and controversy.
Eddy Njoroge will be remembered for shepherding KenGen to the Nairobi Securities Exchange in 2006 in an initial public offer that attracted thousands of retail investors to the stock market for the first time in Kenya’s history.
The IPO rewarded the novice investors with huge capital gains, whetting the appetite of more first timers to come on board popularising the securities market and paving the way for more offerings, including Kenya’s biggest listing — Safaricom.
KenGen’s share price more than tripled upon its debut in the market, nearly doubling the Sh11.90 offer price, and earning the initial buyers of the government’s 30 per cent stake millions of shillings.
Eddy Njoroge’s other achievements at KenGen include the commissioning of major geothermal power plants whose completion is expected to boost the quantity and reliability of power supply in Kenya.
Completion of the geothermal plants will also enable Kenya to retire some of the expensive thermal power plants, saving households and businesses billions of shillings in energy costs currently weighing down on Kenya’s international competitiveness.
Eddy Njoroge’s tenure at KenGen has, however, not been without controversy. He has most recently had to fight accusations that he helped or abetted the siphoning of billions of shillings from KenGen in flawed contracts to suppliers and service providers.
He has denied the allegations in a protracted legal battle pitting KenGen against the publisher of the Nairobi Law Monthly magazine.
It is unclear why Eddy Njoroge opted to retire ahead of his contract, which was to end in March 2015 but he has officially maintained that a decade at the helm of the power producer was good enough.
Kenya Power’s Joseph Njoroge also leaves office months before the start of his new three-year term in September. Former Energy minister Kiraitu Murungi renewed the engineer’s contract shortly before the March 4 General Election in a wave of last-minute crony appointments that drew protests from civil society groups.
Mr Murungi wrote to the Kenya Power chief executive through board chairman Eliazar Ochola, offering the 55-year-old a new three-year term effective from September 1, 2013.
The minister had given Joseph Njoroge a deadline of Thursday, February 28, three days to the election, to confirm his acceptance of the offer.
Critics argued that Mr Murungi’s offer of a new contract to the Kenya Power boss contravened the laid-down procedures for hiring parastatal chiefs, including the requirement that respective boards start the process six months to the end of a serving executive’s term and notify him of its verdict three months to the end of the contract.
The 55-year-old Joseph was appointed to head Kenya Power in June 2007, having worked with the company since 1980. He leaves the company without solving the riddle of costly power supply interruptions and low profitability for a monopoly with a captive and highly underserved customer base.
Despite having a strong business model, Kenya Power’s service delivery and financial performance continues to be weighed down by gross inefficiency and government meddling in its business decisions.
The power distributor loses hundreds of millions of shillings annually through system losses, meter tampering or outright electricity theft. Its system losses currently stand at a high of 17.3 per cent against a target of below 10 per cent.
