Kenya Power has made significant debt repayments totaling 36.88 billion Kenyan Shillings ($231.2 million) to power generators, alleviating its financial obligations due to a shortage of dollars in the market. The repayments, made in various currencies including U.S. dollars, Euros, British pounds, and Indian rupees, are attributed to the easing of Kenya's foreign currency crunch. The utility firm paid $66.1 million in October and $74.34 million in November, along with Euro and Pound payments, addressing outstanding dues. The shortage of foreign exchange had affected Kenya Power's ability to fulfill financial obligations, but improved liquidity in December 2023 allowed the company to initiate payments.
The power purchase agreements between Kenya Power and generators, denominated in foreign currency, protected the generators from local currency fluctuations. The easing forex market in December enabled Kenya Power to address its pending USD/EURO obligations. KenGen, also based in Kenya, settled part of its debts during this period, contributing to the foreign exchange rate fluctuation adjustment charge, resulting in increased power prices. While the recent review led to a price hike, it is anticipated that electricity prices will stabilize in the next review, considering the substantial settlement of outstanding forex repayments by both Kenya Power and KenGen.