Kenya Power’s debts have grown to Sh. 105 billion. This is after the power company took on debts to fund its large infrastructure projects.
According to the company’s 2016 financial statements, KPLC debts shot from 53 billion to Sh. 105 billion. “To manage the interest rate risk, management has endeavoured to only sign and obtain borrowings from institutions that offer contracts with fixed interest rates,” Kenya Power said in its financial report.
Kenya Power has been growing its borrowing by Sh. 10 billion every year, with its largest debts taken between 2014 and 2015. Some of the debts it is servicing include a Sh. 695.5 million loan from the European Investment Bank for the OlKaria project, and two additional loans from the Nordic Development Fund, the Agence Francaise de Development, and the Japan Bank for International Co-operation.
The most expensive debt is a short term loan from Equity bank that is accruing interest of 16 per cent. This year, Kenya Power is expected to pay sh. 8.8 billion. It will be required to pay Sh. 47.4 billion in the next two to five years while the remaining Sh. 50 billion will be due for repayment after the next five years.