Kenya power personnel at work (photo|nation.co.ke)
Kenya power defaulted on paying 6.4 billion it owes KenGen for electricity delivered in the year ending June, prompting the intervention of top Energy Ministry officials.The electricity distributor failed to pay the bill within the required 40-day credit window in line with their contract, exposing KenGen to credit risk,according to financial statements for the year ending June 2017.
Kenya power buys electricity from the state-owned KenGen and independent producers for onward sale to households and businesses.
The distributor is then billed every month for the power delivered and is expected to pay within 40 days.
Th sh.6.4 billion defaulted bill came after the Nairobi bourse -listed utility firm failed to pay sh6 billion for over 60 days and a further sh473.5millon for over a year.In the period to June, the company owned KenGen sh9.1 billion that was within the 40 -day payment window and classified as 'neither past due nor impaired'.
This took Kenya Power's debt to KenGen to Sh15.7 billion in the year to June,which accounted for 94% of the 6.6billion sitting on KenGen's balance sheet as trade receivables.The unpaid debts stood at Sh 10 billion in the year to June 2016,reflecting a growth of 39%.