KenGen investors raise concerns over Sh15.5bn Kenya Power debt

What you need to know:

The shareholders spent most of the question time during the company’s Annual General Meeting seeking assurance from the board that the debt, which is booked as Sh21.8 billion as at the end of the financial year, will be cleared.
Kenya Power paid off KenGen a total of Sh18 billion after closure of its annual financial report leaving a balance of about Sh3.3 billion, but new billings have since raised this amount to Sh15.5 billion as at Tuesday.
It took the intervention of Energy Principal Secretary Joseph Njoroge and KenGen chairman to calm jitters of the multiple inquiries on the debt.

Kenya Electricity Generating Company (KenGen) #ticker:KEGN investors on Tuesday raised concerns about debt owed to the electricity generator by Kenya Power #ticker:KPLC as the utility service provider continues to battle financial headwinds.

The shareholders spent most of the question time during the company’s Annual General Meeting seeking assurance from the board that the debt, which is booked as Sh21.8 billion as at the end of the financial year, will be cleared.

Kenya Power paid off KenGen a total of Sh18 billion after closure of its annual financial report leaving a balance of about Sh3.3 billion, but new billings have since raised this amount to Sh15.5 billion as at Tuesday. It took the intervention of Energy Principal Secretary Joseph Njoroge and KenGen chairman to calm jitters of the multiple inquiries on the debt.

“There is an existing Power Purchase Agreement with Kenya Power and I can assure you it will be settled. So there should be no worries about it,” Mr Njoroge said.

KenGen last month slapped Kenya Power with a Sh1 billion penalty for flouting limits set for repaying debts owed to it in the financial year ended June 2018.

KenGen accounts for some 75 per cent of power purchased by Kenya Power, the only authorised distributor whose financial headwinds have been getting stronger as per the latest results. “Kenya Power is now paying all its monthly obligations when they fall due and we are confident they can repay the loan,” said the power generator’s managing director Rebecca Miano.