Ministry wants Kenya Power to clear producer's debts

Kenya Power staff repair a power line in Migori town. [File, Standard]

The Ministry of Energy is pushing Kenya Power to pay the billions of shillings the company owes a power producer. It also wants electricity consumers, especially State agencies', to clear debts owed to the company.

Kenya Power owes KenGen, the largest electricity producer, Sh18.85 billion in the year to June 2019, while various customers owed the company Sh23.55 billion. State bodies are among the largest defaulters.

The debts may have gone up in the year to June 2020, but their publication was delayed due to the lengthy time it took to appoint the Auditor General.

Energy Principal Secretary Joseph Njoroge said the State is working with the utility company to put in place mechanism that will enable it service its debts.

He observed that the financial soundness of the electricity retailer was critical for the sector, with the company being the only customer for the numerous power industry players.

The ministry, he noted, plans to come with a modality that will compel defaulting government agencies to clear their power bills on time. “The debt by Kenya Power is huge and it is not just KenGen but also other organisations,” said Njoroge. He spoke on Tuesday during KenGen’s annual general meeting in Nairobi on Monday.

“Kenya Power is the only off-taker of electricity and it has obligations on producers and the government will not allow it to be insolvent,” he said.

"In the recent past, there has been a periodic payment plan between KP and KenGen, which is going on well. We will make sure we midwife that relationship to guarantee that this payment is made."

In the year to June 2019, Kenya Power owed KenGen Sh18.85 billion, which saw the power producer penalise the company Sh722.3 million. In 2018, it penalised KP Sh1 billion over Sh21.84 billion debt.