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Kenya Power To Pay KenGen Ksh1 Billion Fine For Delayed Payments


Kenya Power will have to part with Ksh1 billion in fines for delaying Kenya Electricity Generating Company’s (KenGen) payments of Ksh21.88 billion past the 40-day grace period.

The payments are for the financial year ended June 2018.

“Interest income from Kenya Power relates to interest penalties charged due to late payments invoices. Interest on late payments accrues after 40 days,” reads KenGen’s 2017/18 financial year report in part.

According to the report, only Ksh7.44 billion of the Ksh21.88 billion debt had not breached the payment window as per the agreement signed by the two companies, by the time they were closing the financial year books.

By the end of the financial year, KenGen was yet to receive Ksh13.71 billion from Kenya power.

Read: How Kenya Power Managers Framed Junior Officer, Fired Him In Graft Saga

Kenya Power is the only client KenGen supplies, since it is the only electricity distributor in the country.

However, the enactment of the Energy Bill pending in parliament will see new players entering the market, hence giving the electricity generator several options.

KenGen generates hydro, thermal, wind and geothermal electricity which is solely bought by Kenya Power.

“This will allow entry of more players in the wholesale and retail of electricity (business), thus giving KenGen an option to sell bulk energy to multiple customers,” says KenGen in the report.

In February this year, a local firm, PowerGen, applied for a licence to generate and supply electricity to households and small-scale business premises. It is yet to be granted the licence.

However, Energy Principal Secretary Joseph Njoroge reluctant on the market liberalisation idea, saying that it would weaken Kenya Power’s finances.

As quoted by Business Daily in March, the PS says that the move will make it default on its contractual obligations of buying specified amounts of power from producers since the entry of other players would eat into its retail market share.

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Written by Francis Muli

Follow me on Twitter @francismuli_. Email

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