Buying shares in electricity companies to offset power bills

By MUNGAI KIHANYA

The Sunday Nation

Nairobi,

03 August 2025

The announcement that the National Cabinet has approved the privatisation of the Kenya Pipeline Company elicited mixed reactions. For me, this will be an opportunity to invest. Specific details of how many shares and at what price are yet to be work out, but my plan will be to buy enough shares that will pay enough dividends to offset my fuel costs.

Is this doable? Well, I have done something similar with Kenya Power and Lighting Company (KPLC) and Kenya Electricity Generating Company (KenGen). The two are listed on the Nairobi Securities Exchange (NSE) and, over the years, I have been slowly buying their shares. In the year ending 30th June 2024, KPLC paid out a dividend of Sh0.70 per share while KenGen paid Sh0.65. The total dividends that I received from these two companies was just about the same as my annual electricity bills.

Now an interesting question arises: assuming that this dividend payment rate continues, how many shares would be required to offset a person’s electricity bills? The cost of one unit of electricity depends the monthly consumption rate, but for the middle-income family, the average is about Sh30 per unit.

Assuming you have one share in each company, the total dividends is Sh1.35 per share, so, how many do you need to raise Sh30? The answer is simply 30 divided by 1.35, which is 22.22. That is 11.11 shares of each company. Of course, I am not saying that it is possible to buy fractions of shares! The quantities will need to be rounded to the nearest whole number at the time of purchase.

The current price of a KPLC share is Sh11.35, so, 11.11 shares will cost about Sh124. KenGen shares are going for Sh7.40, so 11.11 will be about Sh82. The total investment required to recover one unit of electricity comes to Sh82 + Sh124 = Sh206.

All that remains now is to find out how many units of electricity one consumes in a year. Then multiply that number by 22.22 and the answer becomes the target number of shares in the two companies.

One advantage about investing in shares is that you don’t have to buy all of them at one go. You can buy as many as you can afford and gradually accumulate to your target volume. Furthermore, in the early stages, you can use dividends to buy even more instead of consuming the money. It will take you several years, but remember, Rome wasn’t built in a day!