KenGen’s outstanding loan balance stands at Ksh36.5B – MD tells National Assembly
By Mustafa Juma Kenya, June 12, 2024
Kenya Electricity Generating Company (KenGen) has an outstanding loan balance of Ksh36.5 billion, the company’s Managing Director Peter Njenga has said.
These are the loans guaranteed by the government.
Njenga who appeared before the National Assembly Committee on Public Debt and Privatization on Wednesday, June 12, 2024, to brief it on the status of the loans, said they date back to 1995.
KenGen’s outstanding loans
The outstanding loans were listed as Kipevu I Power Plant (1995), Sondu Miriu Phase I Power Plant (1997), Sondu Miriu Phase II Power Plant (2004), Sangoro Power Plant (2007), Olkaria I & IV and Olkaria I unit 6 Power Plant (2010).
Others are Rehabilitation and Upgrade of Kindaruma Hydropower Plant (2010), and Olkaria I & IV (2011).
The loans, according to Njenga, were lent by Japan International Cooperation Agency (JICA) and KFW Development Bank of Germany.
“In 2022 and 2023, there was deferment of the JICA loan repayments for JICA loans for the period between January -June 2021 and in 2023 there was deferment of the JICA loan repayments for JICA loans for the period between July-December 2021, both and were during Covid period,” Njenga told the Parliamentary Committee members.
How KenGen services the loans
Lawmakers tasked the MD to explain how KenGen has been servicing the loans, and he explained that the company utilizes the proceeds of loans for the implementation of power generation projects and earns revenue through the sale of electricity to Kenya Power upon the completion of the projects.
“KenGen then sets aside funds from the revenue earned to service the loan obligations as and when due. KenGen has over the years maintained a good track record in servicing its loan obligation and we commit to doing so going forward,” he said.
Out of the nine loans, Njenga told the MPs that three were borrowed by KPLC and later novated to KenGen.
The three loans are Kipevu I Power Plant (1995), Sondu Miriu Phase I Power Plant (1997) and Sondu Miriu Phase II Power Plant (2004).
However, the MD pointed out that there is a loan that is not in KenGen books and the project description does not match any of KenGen projects.
He was responding to the lawmakers’ inquiry on the status of Kindaruma Hydropower Plant loan that was lent to KenGen by the KFW Development Bank of Germany.
KenGen is among the 26 state-owned companies slated for privatisation.
For these and more credible stories, join our revamped Telegram and WhatsApp channels.
Telegram: https://t.me/peopledailydigital
WhatsApp: https://whatsapp.com/channel/0029Va698juDOQIToHyu1p