Kenya Power paid out Sh1.42 billion ($11million) to a US energy firm, Ormat Technology, in October as part of overdue obligations for electricity purchases from the latter’s geothermal plants in Olkaria, Naivasha.
The payout reduced the balance of Sh4.69billion ($36.3million) that Kenya Power owed to Ormat as of September 30, 2025, new disclosures showed, adding to the Sh1.96billion($15.2 million) it had earlier paid in April and May.
“The company has historically been able to collect on substantially all of its receivable balances.
As of September 30, 2025, the amount overdue from Kenya Power was $36.3 million, of which $11.0 million was paid in October of 2025,” Ormat revealed in a regulatory filing.
“The company believes it will be able to collect all past due amounts from Kenya Power. 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 Kenya Power non-payment (such as non-payments that are caused by government actions and/or political events” it added.
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 KPLC under a 20-year power purchase agreement that ends between 2033 and 2036.
Besides Kenya, Ormat has international operations in Turkey, Guadeloupe, Guatemala, Honduras, and Indonesia.
The payouts to Ormat come in the wake of improved fortunes of Kenya Power, which posted a profit after tax of Sh24.47billion for the financial year 2024/25, driven by lower costs of sales, higher electricity unit sales, and system efficiencies.
The company’s profitability was buoyed by an increase in electricity sales, which rose by 887 gigawatt-hours(GWh), to 11,403 GWh, an 8percent increase in sales, while total unit purchases grew by 787 GWh.
Kenya Power’s revenues, however, took the biggest hit from industries with sales from this consumer class dropping by 9.5 percent in the year ended June 2025, as reduced electricity tariffs across the board took a toll on the firm.
Company disclosures show that revenues from industries fell to Sh106.49 billion in the review period from Sh117.69 billion a year earlier, while those from homes dropped 1.3 percent to Sh68.19 billion. Among the categories of power users, only street lighting and electric mobility recorded growth in revenues.
Kenya Power’s total sales dropped five percent to Sh219.28 billion in the review period, when its net profit dipped 18.66 percent to Sh24.47 billion.
The revenue fall came in a year when base electricity tariffs fell by up to Sh1.40 per kilowatt-hour (kWh) in the third year of cuts that started in July 2023.
The reduced price per unit of electricity negated the growth in the number of units that Kenya Power sold, with sales rising to 11,403 GWh in the year to June 2025 from 10,516 GWh a year earlier.
The drop in revenues is the first for Kenya Power in at least a decade, highlighting the impact of the lower tariffs that were meant to ease pressure on consumers.
