KenGen Debt Recovery: Djibouti Offers KSh 129M ($1M) First Payment on Geothermal Drilling InvoicesKenGen Debt Recovery: Djibouti Offers KSh 129M ($1M) First Payment on Geothermal Drilling Invoices
Key Highlights
- Djibouti's state geothermal agency has put a first instalment on the table for a drilling debt that KenGen has carried for five years.
- The offer of KSh 129M ($1M) covers only part of unpaid invoices totalling KSh 276.03M ($2.13M) from the geothermal drilling contract.
- KenGen's latest annual report discloses the proposal, giving the first public sign of movement on a receivable tied to a foreign state client.
Djibouti's state-owned geothermal agency has offered to pay KenGen a first instalment of KSh 129M ($1M) on a drilling debt that has stood unpaid for five years, a possible turning point for the Kenyan power producer's efforts to recover money owed by a foreign state client.
The offer matters because it covers only part of what is owed. According to the latest annual report of the company, in which the National Treasury holds the state's stake, the Djibouti Office of Geothermal Energy Development (ODDEG) proposed an initial $1M payment against outstanding invoices of KSh 276.03M ($2.13M), which arose from a geothermal drilling contract.
What the offer covers
The proposed payment would settle a little under half of the invoiced amount if accepted at face value. The remaining balance, about KSh 147.03M ($1.13M) on the figures disclosed, would still be outstanding after the first instalment. The annual report does not set out a repayment schedule for that balance, and it does not say whether KenGen has accepted the proposal.
The debt dates back to drilling work KenGen carried out for the Djibouti agency. KenGen sells drilling services outside Kenya as well as generating power at home, and a state-owned counterparty that is slow to pay ties up cash the company could use elsewhere.
Why receivables from state clients matter
For a listed utility, a five-year-old invoice from a government agency is a test of how far regional contracts can be turned into cash. KenGen has been seeking investors and partners for its Olkaria operations, and Mwenendo earlier reported on how KenGen courts investors at its Olkaria Deal Room ahead of its sustainable energy conference in November.
The company is also under pressure at home. As Mwenendo earlier reported, Kenya is weighing 500MW from Dangote's Lamu refinery while peak demand has climbed past 2,500MW, so steady cash from existing contracts supports its wider plans.
What is still unknown
Neither KenGen nor ODDEG has publicly said when the first payment would be made. The annual report describes the amount as a proposal, so the debt remains unpaid until money actually moves. Readers should treat the offer as a step towards recovery rather than a settlement.
Mwenendo will update this story if KenGen confirms receipt of the payment or agrees a schedule for the remaining balance.
In Summary
- Who made the offer?
- Djibouti's state-owned Office of Geothermal Energy Development (ODDEG), to KenGen.
- What was offered?
- A first payment of KSh 129M ($1M) against unpaid invoices of KSh 276.03M ($2.13M).
- How old is the debt?
- About five years old, according to KenGen's latest annual report.
- Why does it matter?
- It is the first reported movement on a receivable from a foreign state client.
- How much would remain unpaid?
- About KSh 147.03M ($1.13M) on the figures disclosed, with no repayment schedule published.