KenGen’s debt structure provides a clear illustration of why movements in the Kenya shilling can influence electricity costs. The company’s interest-bearing debt is almost entirely denominated in foreign currencies, meaning its obligations are exposed to movements in the shilling against the currencies in which it borrowed. Early 2026 figures put KenGen’s debt stock at about KSh112.4 billion, with roughly 70% government on-lent and only about 8.8% classified as commercial borrowing.
The currency breakdown is particularly revealing. Approximately 47.6% of KenGen’s debt is in Japanese yen, 39.9% in US dollars and 12.5% in euros. In other words, essentially the entire debt burden is foreign-currency exposure, with the dollar accounting for about 40%. When the shilling loses value against these currencies, the shilling equivalent of KenGen’s obligations increases, creating exchange losses even when the underlying foreign-currency debt has not changed.
IPPs have a similar vulnerability, although there is no single official figure showing exactly what percentage of all IPP debt is foreign-currency denominated. Their projects have generally relied heavily on international lenders, development-finance institutions and export-credit agencies, while many power-purchase agreements are denominated or indexed in US dollars. This means that a weaker shilling can increase both the cost of servicing project debt and the shilling value of payments under those contracts.
The scale of the exposure can be seen in EPRA’s monthly forex-adjustment figures. IPPs have recently accounted for the majority of reported sector foreign-exchange losses, while KenGen and Kenya Power contribute smaller amounts. In one recent period, for example, IPPs accounted for roughly KSh1.04 billion of about KSh1.4 billion in combined sector forex losses. These figures do not prove that a specific percentage of IPP debt is dollar-denominated, but they demonstrate how significant the sector’s foreign-currency exposure has become.
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The distinction matters because it shows that Kenya’s electricity-price problem is partly a currency problem embedded inside the financing structure of the power sector. KenGen’s debt gives us a concrete number, virtually 100% foreign currency, with about 40% in dollars while the IPP portfolio is less transparent but clearly carries substantial dollar exposure. As long as generators and power projects borrow and contract extensively in foreign currencies while electricity consumers pay in shillings, a weaker shilling can translate into higher electricity costs even without an increase in the underlying price of power.
