Posted on :Monday , 9th September 2019
Kenya Power, the electricity distribution monopoly, has inked a deal with four auto dealers to supply a fleet of vehicles at Sh379 million. The partly State-owned firm, which is eyeing an improvement of its financial position revealed the amount in a tender notice.
Kenya Power acting Chief Executive Jared Othieno did not respond to queries on whether the vehicles deal was a purchase or a leasing plan.
It was also not immediately clear how many vehicles will be provided under the deal and whether they will be used by staff or set aside for electricity connection. Some departments like the police have turned to vehicle leasing in what has become a boon for leasing firms, financiers and auto dealers.
In the Kenya Power deal, Toyota Kenya will supply vehicles for Sh241.54 million while Simba Corporation has signed for Sh34.4 million worth of cars.
Simba Caetano Formula will provide vehicles worth Sh52.66 million while Isuzu East Africa will provide vehicles worth Sh51.26 million. Kenya Power says it accepted the deal in July.
Early this year, mega electricity generation projects valued at billions of shillings were left in limbo after Kenya Power froze the signing of new power purchase agreements (PPAs) indefinitely, citing financial loss and excess capacity. Power purchase costs, excluding fuel and foreign exchange, increased by Sh2.59 billion to Sh52.79 billion in the period.
Kenya Power opened talks with its creditors to extend the payment period for segments of its loan obligations maturing in the current financial year.
“We are beginning to renegotiate part of the loans and convert them into long-term debt to meet the negative liquidity gap,” acting chief executive Jared Othieno said.