Corporate NewsKengen Set to Receive Kes 23 Billion Debt Payment from KPLC.

Kengen MD Rebecca Miano

The government has stated it will ensure Kenya Power pays its debt to KenGen and other power producers.

This comes after concerns were raised that the electricity distributor’s default could hurt the entire supply chain if it is not resolved in the near term.

As of June 2020, Kenya power owed Kes 23.9 billion to the energy distributor, the largest claim yet. KPLC also owes independent power producers Kes 20.5 billion even though it was not immediately clear how much of the amount is in default.

During KenGen’s virtual annual general meeting held last week, Energy PS Joseph Njoroge said there were plans to ensure both companies are financially stable.

”The government is a shareholder in both KPLC and KenGen and will make sure that both companies are [financially] feasible There have already been interventions including deferring KPLC’s obligations to the National Treasury.” Energy PS Joseph Njoroge

Kenya Power said it is working with the government on several initiatives to improve its liquidity position, including renegotiating loan terms and deferment of interest. Others are the impending review of the Power Purchase Agreements.

However, the government did not have a timeline of when the debt repayment will commence.

Last year, KenGen indicated they were planning to sell power directly to customers as soon as the related regulations are finalised, which would give competition to the country’s sole electricity distributor, Kenya Power.

The Ministry of Energy has completed drafting the regulations to bring to fore the operation of the Energy Act that was signed into law by President Uhuru Kenyatta in March 2019. The Act allows other firms to apply for retail licences to sell electricity.

KenGen, which contributes over 70 per cent of electric supply to Kenya Power, has been keen to target large-scale consumers.

KenGen Financial performance

During the annual general meeting, Kengen announced shareholders of energy producer would start receiving their Kes 1.98 billion dividends for the year ended June 2020.

This is the highest dividend payout by the firm so far after shareholders were paid Kes1.65 billion in 2019. The payment is at Kes 0.30 per ordinary share.

The energy producer posted a  Kes13.9 billion profit before tax for the financial year ended 30th December 2020, representing an 8.3 % growth from the previous year when it made kes 11.6 billion.

 

 

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