The Kenya Electricity Generating Company (KenGen) has allowed Kenya Power to pay back part of its foreign currency-denominated debts in Kenya Shillings, easing pressure on the utility firm to source dollars.
KenGen Managing Director Peter Njenga said on Thursday that the company was in talks with Kenya Power over settling debts owed by the utility firm, with an aim of having Kenya Power settle part of the debt which ought to be repaid in dollars, in local currency.
The electricity generator said it arrived at the decision considering the challenge of accessing dollars in the market currently.
“We know that KPLC owes us quite a substantial amount and we have worked so hard with them to ensure that that amount is reduced, and it is reducing. Part of that debt is supposed to be paid in foreign currency and considering that we have a problem with foreign currency, we are actually in negotiations so that they can also make the payments in Kenya Shillings equivalent. We have no problem with that,” said Mr Njenga.
He said they have been in talks with Kenya Power, which have so far resulted in full settlement of the old debt, and that the utility firm now only remains with current debts.
Records from the two companies by the end of last year showed that Kenya Power owed KenGen upwards of Sh23 billion. Kenya Power booked a Sh3.2 billion net loss in the financial year ended June 2023.
Mr Njenga said Kenya Power can repay foreign currency-denominated debts in Kenyan Shillings, to the effect it does not touch on amounts KenGen is supposed to use to pay its own foreign-denominated debts.
“That is where we have to get foreign-denominated currencies from KPLC,” said the MD.