Kenya Power, KenGen set debt repayment schedule
By Noel Wandera, November 25, 2020
Noel Wandera
Kenya Electricity Generating Company Plc (KenGen) has settled on a dynamic repayment plan to allow Kenya Power (KP) clear outstanding debt estimated at over Sh18 billion.
Finance Director John Mudany said the monthly repayment plan, which is already in operation, is dynamic and will be discussed every month, based on the firm’s cash flows.
He said, last month the company paid KenGen Sh4 billion, with a similar amount expected at the end of this month and new invoices being regularly cleared.
In March, the firm was given a moratorium by the government for payment of an EXIM loan worth $2.3 million (Sh252.5 million) due to the Covid-19 pandemic.
KenGen managing director Rebecca Miano said going forward, the power distributor will be able to pay for every month going forward so that the old debts do not increase and also in every month pay some of the older debts.
Various projects
The two officials spoke yesterday during an energy webinar which KenGen hosted for journalists to bring them up to speed with various projects the power producer is undertaking.
The power generator is owed in excess of Sh18 billion by Kenya Power, a figure that represents about 45 per cent of its revenues.
In the financial year ended June 30, 2019, the company returned a profit after tax of Sh7.9 billion on the back of a financial base of Sh46 billion.
Miano said KenGen is moving into clean energy, and has recently floated a tender to phase out thermal power with gas fired plants with an eye to lowering the cost of electricity for its consumers.
The firm controls 75 per cent of the market with an installed capacity of 1,803 MW from a mix hydro (818MW), geothermal (706) and wind (25.5MW), supplemented by isolated mini-grids with a combined capacity of 28.5MW, brining national installed capacity to 2,791MW.
It will earn Sh23 billion in tax credits based on the costing of its Ol Karia V 165MW power plant commissioned in November last year, with subsequent tax credits cut at 50 per cent due to the new Finance Act 2020, Mudany added.
KenGen has received exemption on Value Added Tax for inputs for its Olkaria 1 Unit VI83 power plant due next year.
Miano said peak daily demand for electricity had risen to 1,944MW having dipped in April, May and June.