The sports category has moved to a new website.

Kenya Power's new plan to collect dollars from consumers

Kenya Power is exploring a new strategy to collect dollars after EPRA said it would not approve a plan to bill consumers in dollars

A Kenya Power worker on site

Kenya Power is considering collecting payments in dollars or euros from its larger consumers to reduce its exposure to foreign currency risks and the ongoing dollar crisis.

The company's Finance General Manager, Stephen Vikiru Kinadira, said that although billing will still be in the local currency, they will collect payments in dollars where possible, which would help the company meet some of its dollar-denominated obligations.

“Trying to get internal dollar flows is another measure of dealing with the challenge. We will not be billing in dollars, we are billing in shillings as per approved tariffs but collecting in dollars where possible.

ADVERTISEMENT

“In the next month or so we will start engaging directly with some of our clients who we know have dollar flows based on the nature of their business," Mr Kinadira said.

A significant portion of the firm's purchase obligations, particularly for Independent Power Producers (IPPs), are in foreign currency.

Kenya Power's monthly foreign currency requirement is $50 million (Sh6.5 billion) and €20 million (Sh2.8 billion), while its quarterly loan obligations are $30 million (Sh3.9 billion), resulting in higher finance costs due to the higher foreign exchange rates.

The availability of foreign exchange poses a risk of default, and Kinadira believes that collecting payments in dollars would help the company obtain the foreign exchange it needs to meet its obligations.

ADVERTISEMENT

In the short term, Kenya Power (KP) is seeking to refinance some of its commercial debts that are in foreign currency, while in the long term, they plan to structure loans and power purchases in Kenya shillings, as well as non-tariff revenues that are multi-currency.

They are also engaging banks to explore the possibility of putting rolling orders to obtain the best rates possible for the required dollars.

However, the strategy to collect payments in dollars or euros may not be feasible as the Energy and Petroleum Regulatory Authority (EPRA) opposed the plan due to concerns that the utility would be compensated twice for exchange rate losses.

ADVERTISEMENT

KP's Finance General Manager, Stephen Vikiru Kinadira, has acknowledged that the government's decision to source fuel on credit to ease the pressure on the dollar would be helpful, especially during thermal generation.

JOIN OUR PULSE COMMUNITY!

ADVERTISEMENT

Eyewitness? Submit your stories now via social or:

Email: news@pulselive.co.ke

Recommended articles

Kenya to host premier tourism investment forum

Kenya to host premier tourism investment forum

Nigeria and the Netherlands have expressed eagerness in doing business together

Nigeria and the Netherlands have expressed eagerness in doing business together

Tanzania allocates Sh10.48 Trillion ($4.4 billion) to tackle debt for 2022–2023

Tanzania allocates Sh10.48 Trillion ($4.4 billion) to tackle debt for 2022–2023

Sudan’s ongoing conflict is taking its toll on business relations with neighbors

Sudan’s ongoing conflict is taking its toll on business relations with neighbors

Gov't commences 2nd project under Ruto's Sh500B deal with U.K. Prime Minister

Gov't commences 2nd project under Ruto's Sh500B deal with U.K. Prime Minister

Kenya Power, Safaricom partner to launch Smart Poles in Nairobi

Kenya Power, Safaricom partner to launch Smart Poles in Nairobi

Legal action from Australia may threaten Cameroon-China joint project

Legal action from Australia may threaten Cameroon-China joint project

KRA allocated Sh1.2B to go after Kenyans evading tax

KRA allocated Sh1.2B to go after Kenyans evading tax

Weapons acquisition amongst other spending has seen Egypt's debt soar uncontrollably

Weapons acquisition amongst other spending has seen Egypt's debt soar uncontrollably

Pulse Sports

Faith Kipyegon makes special dedication after shattering world record in Italy

Faith Kipyegon makes special dedication after shattering world record in Italy

Fred Arocho, Eric Njiru thrill fans as football season concludes [Photos]

Fred Arocho, Eric Njiru thrill fans as football season concludes [Photos]

Unleashing the power of M-PESA & its impact on mobile banking and sports betting

Unleashing the power of M-PESA & its impact on mobile banking and sports betting

Comedian Arap Uria received by Senator Mandago after cycling from Eldoret to Nairobi

Comedian Arap Uria received by Senator Mandago after cycling from Eldoret to Nairobi

Thika Sports Club, next stop for NCBA golf series

Thika Sports Club, next stop for NCBA golf series

Big Ted's inspiring message to Kenya's rugby community

Big Ted's inspiring message to Kenya's rugby community

Fitness influencer Shiv Simani joins fight against sports neglect by gov't

Fitness influencer Shiv Simani joins fight against sports neglect by gov't

Kipchoge wins Sh7.4M prize in Spain

Kipchoge wins Sh7.4M prize in Spain

Ombachi shares how career-threatening injury pushed him into content creation

Ombachi shares how career-threatening injury pushed him into content creation

ADVERTISEMENT