The Kenyan Electricity Generation Company (KenGen) has revealed that it is yet to pay some of its debt dating back 30 Years.
KenGen's Managing Director, Peter Njenga, on Wednesday informed the National Assembly Committee on Public Debt and Privatisation that the company’s outstanding loan balance for government-guaranteed loans stands at Sh36.5 billion.
Njenga's briefing to the committee, chaired by Balambala MP, Abdi Shurie, detailed the status of these loans, which date back to 1995.
The loans were utilised for several power plant projects, including Kipevu I Power Plant that was done in 1995, Sondu Miriu Phase I in 1997 and Phase II (2004).
In 2007 part of the loan went to advancing operations at Sangoro Power Plant, Olkaria I & IV and Olkaria I Unit 6 (2010), and the Rehabilitation and Upgrade of Kindaruma Hydropower Plant (2010).
These projects were funded by the Japan International Cooperation Agency (JICA) and the KFW Development Bank of Germany.
“In 2022 and 2023, there was deferment of the JICA loan repayments for JICA loans (for KE-P20. KE-P21, KE-P23, KE-P24 KE-P26) for the period between January -June 2021 and in 2023 there was deferment of the JICA loan repayments for JICA loans (for KE-P20. KE-P21, KE-P23, KE-P24 KE-P26) for the period between July-December 2021 both and were during Covid period,” Njenga told the committee.
When asked by the Committee about the provision for servicing the loans, the MD told it that the company utilises the proceeds of loans for the implementation of power generation projects and earns revenue through the sale of electricity to Kenya Power upon the completion of the projects.
“KenGen then sets aside funds from the revenue earned to service the loan obligations as and when due. KenGen has over the years maintained a good track record in servicing its loan obligation and we commit to doing so going forward,” the MD said.
Three loans; Kipevu I Power Plant (1995), Sondu Miriu Phase I Power Plant (1997) and Sondu Miriu Phase II Power Plant (2004) out of the nine loans were borrowed by KPLC and later novated to KenGen, according to the MD.
On the status of the Kindaruma Hydropower Plant loan that was lent to them by the KFW Development Bank of Germany, the MD told the Members that the loan is not in KenGen books and the project description does not match any of KenGen projects.
