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How Kenya Power Increases Debt Of Ksh109 Billion In 15 Years –

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Kenya Power has been borrowing an average of Ksh7 billion over the past 15 years, a move that has reduced its debt to Ksh109.9 billion by June 2020 from Kshh4.1 billion in 2004.

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Ksh56.6 billion is owed to commercial banks while Ksh53.2 billion is owed to other lenders, guaranteed by the Kenyan government.

For banks, Kenya Power owes Standard Chartered Ksh39.3 ​​billion, Rand Merchant Bank Ksh9.2 billion, Equity Bank Ksh4.9 billion and Agence Francaise De Development Ksh1.2 billion.

A report by former Audito chief Edward Ouko reveals that huge debts were accumulated during the past eight years, following a Jubilee government project aimed at the end of the Last Mile.

The project has seen the electricity network increase from 41,486 kilometers in 2013 to 84,681 kilometers in 2020, while connectivity has increased to 7.5 million from 1.2 million.

Read: Slow Purchase of Signs due to Large Number of Activities – Definition of Kenyan Power

But this did not come without cost. Despite recording an increase in revenue from Ksh20.3 billion in 2004 to Ksh133.3 billion in 2020, Kenya Powerhas could not compare operating costs with voting loans and maturity.

For example, one of the loans owed to Standard Chartered will expire in June, similar to the one owed by Rand Merchant bank.

If the electricity supplier publishes a loss of Ksh939 million in the financial year ended June 2020, it is unlikely that he will be able to provide credit. Instead, it can turn to other lenders, or extend the maturity period that would attract more interest.

Kenya Power has paid interest of Ksh33.9 billion on its own loan between 2012 and 2019. Kenya Power has paid interest of Ksh1.1 billion in 2012, Ksh1.3 billion in 2013, Ksh2.2 billion in 2014 and Ksh4.6 billion in 2015. In 2016, it paid interest on its loans of Ksh5.7 billion, Ksh5.5 billion in 2017, Ksh6.1 billion in 2018 and Ksh7.1 billion in 2019.

Read: Kenya’s Powerful Expectations To Increase Revenue Through Charging Electric Vehicles

In the six months to December 2020, Kenya Power funds cost more than double Ksh8 billion from Ksh3.8 billion over the same period in 2019.

The responsibility for the annual debt to Kenya Power has hit Ksh20 billion.

Despite many connections providing less revenue, there are fears that there was a lot of poor management in implementing them where costs were contributed.

To compensate for its growing financial crisis, Kenya Power has announced an Exhibition of Interest (EOI) by re-financing its commercial debt of Sh54.6.

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