Kenya Power, the state-owned utility, has cleared a $22.7 million power purchase bill with Ormat Technologies, a US geothermal energy tech startup, to allay worries of a default, which would have seen Ormat Technologies bill Kenya National Treasury.
What The Kenya Power Debt Represents
The money is part of a KSh2.92-billion ($25.52-million) overdue debt owed to the Naivasha, Kenya-based geothermal power company that was scheduled to be paid by the end of December, according to Business Daily. The corporation is still owed KSh296.4 million ($2.6 million) by the electric power distribution provider.
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“As of December 31, 2021, the sum owed to KPLC in Kenya was $25.5 million, with $22.9 million paid in January and February of 2022,” Ormat Technologies said.
Despite the fact that Kenya Power payment was 63 days late, Ormat believes it would be able to collect all outstanding payments in the country.”The collection from KPLC has deteriorated and has become slower than in the past. Ormat stated, “The Company thinks it will be able to collect all past-due sums in Kenya.”
Kenya accounted for 15.5 percent of the company overall electrical revenues in the preceding year, according to the company.
“Kenya contributed a significant share of international revenues, as did Honduras, Guadeloupe, Guatemala, and other nations to a lesser level. The company stated that “our operations in Kenya contributed significantly to gross profit and net revenue.”
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According to Business Daily, the company sells the electricity generated by the power facilities in Naivasha to Kenya Power under a 20-year PPA that will terminate between 2033 and 2036.
Kenya Power Numbers
Kenya Power profit increased a few weeks ago, according to Bloomberg, after the country government and the corporation put additional pressure on state-owned companies to recover unpaid electricity bills.
Kenya Power revenue increased by 21% to Ksh83.6 billion ($731 million) in the six months to December, resulting in a profit of Sh3.8 billion ($33.2-million), up from Ksh138 million ($1.2 million) a year ago.In July 2021, the National Treasury hinted that the distribution company is one of 18 troubled state-owned enterprises that will require up to Sh382-billion ($3.34-million) in funding over the next five years to stay afloat.