Kenya Power has reduced its outstanding debt by Sh7.82 billion in the year ended June 2026, after settling the last instalment of a 10-year, $350 million loan from Standard Chartered Bank. The utility company's total borrowings dropped to Sh79.82 billion from Sh87.64 billion in June 2025. This significant reduction in debt has been attributed to the final settlement of Sh7.07 billion on the StanChart loan.
The repayment of the StanChart loan has led to a substantial decrease in Kenya Power's finance costs. The company's finance costs dropped by 34 percent or Sh1.64 billion to Sh3.08 billion in the year. This reduction in finance costs has contributed to Kenya Power reporting a 2.1 percent increase in net profit to Sh24.99 billion in the period. The company's ability to optimize its debt portfolio and minimize financing costs has played a crucial role in achieving this growth.
Kenya Power contracted the StanChart loan in June 2016, at a rate of the prevailing London Interbank Offered Rate (Libor) plus 4.5 percent. The loan's local currency equivalent value was Sh35.4 billion at the time, as the shilling was trading at Sh101.10 to the dollar. Since then, the shilling has depreciated to the current Sh129.40 average to the dollar. The company has been paying down the loan over the years, progressively cutting down the outstanding amount.
The settlement of the StanChart loan has also reduced Kenya Power's non-guaranteed commercial debt from Sh10.84 billion to Sh3.1 billion. This balance is a shilling loan owed to NCBA Bank Kenya, which was contracted on October 9, 2020, with a tenor of 12 years and an interest rate of the central bank rate plus two percentage points. The company's efforts to reduce its debt and optimize its debt portfolio are ongoing.
Kenya Power has been actively paying down its loans in recent years. In September 2025, the company paid down a balance of Sh2.27 billion on a seven-year, dollar-denominated loan from South Africa's Rand Merchant Bank. The loan was charged a fixed interest rate of 7.95 percent. Additionally, Kenya Power cleared a balance of Sh265.9 million on a $150 million loan from Equity Bank that was taken up in 2014.
The company's on-lent loans, which are guaranteed by the government, fell slightly to Sh76.4 billion from Sh76.8 billion in June 2025. The largest guaranteed facilities were two long-term loans of Sh15.8 billion each owed to the World Bank and the China Exim Bank, carrying an interest rate of three percent each. These loans are part of Kenya Power's efforts to secure funding for strategic capital investment.
According to Kenya Power, the movement in finance costs was attributable to changes in borrowing levels and foreign exchange movements. The company continues to optimize its debt portfolio to minimize financing costs while maintaining adequate funding for strategic capital investment. This approach has enabled Kenya Power to reduce its finance costs and improve its financial performance.
Key points
- Kenya Power's finance costs dropped 34% to Sh3.08bn after paying off a Sh7.82bn loan from Standard Chartered Bank.
- The company's net profit increased by 2.1% to Sh24.99bn in the year ended June 2026.
- Kenya Power's total borrowings dropped to Sh79.82 billion from Sh87.64 billion in June 2025.
