Kenya Electricity Generating Company (KenGen) has hit Kenya Power with a Sh936 million penalty for late payment.
According to KenGen, intrests on the late payments accrues after 40-days window of paying for the electricity supplied in the financial year ended June 2021.
In the recently published annual report shows that the penalties rose by Sh136.02 million over the period from Sh800.25 million last year.
“Interest income from Kenya Power relates to interest penalties charged to Kenya Power due to late payments of invoices. Interest on late payments accrues after 40 days,” says KenGen.
By February, Kenya Power was owing KenGen Sh24 billion for electricity supplies pointing to accumulated debts that will eat into the profit through high finance costs.
The amount grew 24 per cent in the year to June 2020 from the Sh19.37 billion owed in 2019.
Kenya Power has been struggling to sell the electricity supplied by power generators such as KenGen and collect money on time to meet the 40-day credit window.
KenGen net profit dropped 93.5 in the year ended June on what the power producer blamed on higher taxation.
The company reported net earnings of Sh1.2 billion in the review period, down from Sh18.4 billion a year earlier.
It incurred an income tax expense of Sh13.5 billion in the period, having booked an income tax credit of Sh4.5 billion the previous year.
“The corporate tax rate was reduced from 30 per cent to 25 per cent in 2020 but reversed back to 30 per cent in 2021 resulting in a tax expense of Sh8.7 billion on deferred tax compared with a credit of Sh8.1 billion in the previous year,” the company said in a statement.
“This contributed significantly to the high tax expense of Sh13.5 billion compared to a previous year tax credit of Sh4.5 billion.”
KenGen proposed a dividend of Sh0.3 per share or a total of Sh1.9 billion, the same as for the prior year.
