Kenya Power and Lighting Company (KPLC) has been granted a one-year extension to repay KES 25.12 billion ($196.25 million) owed to the government, allowing the utility firm time to restructure its commercial debt and improve its cash flow position.
According to its 2022 annual report, Kenya Power said it has obtained an extension of the on-lent debt repayment moratorium approved by the National Treasury amounting to KES 25.12 billion ($196.25 million) to June 30, 2024, from the current deadline of June 30, 2023.
This comes at a time when the utility firm reported a KES 37.65 billion ($294.14 million) expenditure on expensive power in the 12 months to June 30, 2022, as discussions on whether to terminate long-term power purchase agreements (PPAs) with independent power producers (IPPs) falter.
During the 20221/22 financial year, net debt in the utility firm was KES 95.91 billion ($749.29 million) compared to KES 103.55 billion ($808.98 million) reported in the previous year.
“The increased availability of cash from the extended debt tenors, and lower finance cost obligations resulting from negotiating lower interest rates on existing debt facilities, will be used to accelerate payment of outstanding trade payables,” the firm says.
However, KPLC reported a net loss of KES 1.14 billion ($8.9 million) in the six months to December 31, 2022, from a net profit of KES 3.81 billion ($29.76 million) in the same period in 2021, which was attributed to increased forex losses and implementation of the 15 per cent reduction of the end-user tariff from January 2022.
Read also; KPLC Posts Net Loss of KES 1,589 Million in H2 2022.
