Kenya Power has paid out Sh2.58 billion ($20million) as part of a Sh4.94 billion ($38.3million) debt to a US energy firm-Ormat Technology, for electricity supplies as of December 31, 2024, amid improved profitability and liquidity for the majority State-owned company, new disclosures showed.
The latest regulatory filings by the Naivasha-based geothermal power producer showed that Kenya Power paid Sh2.58 billion in January and February 2025—leaving a balance of Sh2.36 billion.
“We have historically been able to collect on substantially all of our receivable balances. As of December 31, 2024, the amount overdue from KPLC in Kenya was $38.3 million of which $20 million was paid in January and February of 2025,” Ormat said.
“The company believes it will be able to collect all past due amounts in Kenya. This belief is supported by the fact that in addition to KPLC's obligations under its power purchase agreement, the company holds a support letter from the Government of Kenya that covers certain cases of KPLC non-payment (such as non-payments that are caused by government actions and/or political events),” it said.
The US firm operates within the Naivasha-based Olkaria III complex through its wholly-owned subsidiary, OrPower 4, Inc., where it has an output capacity of 150 megawatts(MW)of geothermal power.
The company sells the electricity produced by its power plants in Olkaria to Kenya Power under a 20-year power purchase agreement that ends between 2033 and 2036.
Ormat said revenues from power sales in Kenya in 2024, accounted for 13 percent of its total revenues globally. The company booked Sh90.73 billion ($702.264 million) in total revenue from its global electricity business segment in 2024, up from Sh8.14 billion ($666.76 million) the previous year—which means that Kenya accounted for about Sh11.79 billion of Ormat’s income from electricity sales in 2024.
Besides Kenya, Ormat has international operations in Turkey, Guadeloupe, Guatemala, Honduras, and Indonesia.
“In 2024, a substantial portion of international revenues came from Kenya and, to a lesser extent, from Honduras, Guatemala, Guadeloupe, and other countries. Thus, disturbances to and challenges facing our foreign operations, especially in Kenya, could have impacts on our business ranging from moderate to severe” the US firm said.
The debt payments to Ormat came in the wake of improved financial performance by Kenya Powewr which reported a Sh. 9.97 billion after-tax profit for the half year ended December 31, 2024, driven by increased electricity sales, lower cost of sales, and reduced finance costs because of the stability of the Kenya Shilling against major foreign currencies.
The performance saw Kenya Power declare its first interim dividend in nine years. The power utility declared an interim dividend of Sh0.20 per share amounting to Sh390.29 million as net profits for the six months to December 31, 2024, rose from Sh319 million the previous year.
During the period, Kenya Power’s electricity sales increased by 5 percent to 5,506 gigawatt hours (GWh) compared to 5,225 GWh recorded during a similar period in the previous financial year. The electricity sales however fell 5.4 percent in terms of absolute value to Sh107.42 billion.
“The increase in electricity unit sales was driven by higher consumption as a result of improved network reliability, the connection of new customers, and improved outage resolution timelines supported by the availability of critical materials including meters and transformers,” Kenya Power’s Managing Director & CEO, Joseph Siror said when he released the firm’s financial results for the half year to December 31, 2024.
