Kenya Power pays Sh1 billion to US energy firm OrmatMonday May 09 2022
Kenya Power #ticker:KPLC last month wired Sh1 billion to US energy firm Ormat Technologies, to offset a power purchase bill owed by the electricity distributor, the American firm says.
The money was part of a total pending bill of Sh2.27 billion owed to the Naivasha-based geothermal power producer, the firm disclosed last week.
“As of March 31, 2022, the amount overdue from KPLC in Kenya was $19.8 million of which $9.4 million was paid in April 2022,” Ormat Technologies said in regulatory filings with the US Securities and Exchange Commission (SEC).
Ormat operates within the Naivasha-based Olkaria III complex through its wholly-owned subsidiary, OrPower 4, Inc., where it produces 150 megawatts of geothermal power.
The company sells the electricity produced by the power plants in Naivasha to Kenya Power under a 20-year PPA ending between 2033 and 2036.
The New York Stock Exchange-listed Ormat recorded a 10.4 percent growth in first-quarter revenue to $183.7 million (Sh21.1 billion) with Kenya accounting for 14.1 percent of the revenues in the three months ended March this year.
“Our operations in Kenya contributed disproportionately to gross profit and net income,” said Ormat.
The company earlier said its total revenues from Kenya Power last year dropped by 10.94 percent to $102.8 million (Sh11.8 billion) from $115.4 million (Sh13.1 billion) the previous year.
The firm disclosed that in the year to December, 15.5 percent of its total electricity revenues came from Kenya.
“A substantial portion of international revenues came from Kenya and, to a lesser extent, from Honduras, Guadeloupe, Guatemala and other countries. Our operations in Kenya contributed disproportionately to gross profit and net income,” it said.
Kenya Power booked the third-largest power purchase bill from OrPower 4 in the year ended June last year after Kenya Electricity Generating Company (KenGen) #ticker:KEGN (Sh41.1 billion) and Lake Turkana Wind Power (Sh17.3 billion), according to the electricity utility’s latest annual report.
Kenya Power's net profit for the six months to December jumped over 27 times to Sh3.81 billion from Sh138 million in a similar period a year earlier on the back of higher electricity sales and lower operating costs.