Kenya Power in heavy debt

The Kenya Power is heavily in debt of over billions of shillings that it owes a power producer. The Ministry of Energy is pressing the Kenya Power to pay its debts as well as electricity consumers.

The Kenya Power is indebted to the KenGen, the largest power production company, of Sh18.85 billion from June 2019. Whereas, consumers are in debt of Sh23.55 billion that should have been paid to the Kenya Power. The State, as well, is among the consumers that are in debt over a larger amount.

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According to statistics, the debts have gone up since the debt of June 2019. Although the publication of the debt amount took longer time due to the appointment of the Auditor General. Joseph Njoroge, the Energy principal secretary, is working closely with the company to lace mechanisms that will ensure its debts are reduced.

Njoroge notes that the financial status of the electricity retailer is critical for the power sector since it is the only customer for the many power industries. He states that the ministry shall project a plan that will make defaulting government agencies to clear their electricity bills on time. “The debt by Kenya Power is huge and it is not just KenGen but also other organizations,” he added.

Njoroge furthermore said that the Kenya Power is the only off-taker of electricity and it has duties on producers and the government will not allow it to go bankrupt. Similarly, in the past there has been a periodic payment scheme between KP and KenGen which is going well. The Ministry of Energy will make sure the payment to KenGen will be made as well as the customers in debt will make payment.

Consequently, KenGen has penalized Kenya Power of Sh722.3 million over its Sh18.85 billion debt. In 2018, Kenya Power was penalized Sh1 billion over a Sh21.84 billion debt.