Business / News
Thursday, 01 Dec 2016 13:16 EAT
Electricity generation company KenGen will spend up to USD8.1 billion (Sh800 billion) over the next five years to develop new geothermal and wind power plants. KenGen MD Albert Mugo said the company plans to increase the capacity by 2,500MW, a 50+% increase on current levels, by 2025. He said the company will align itself with the national government to reduce customer tariffs to supply cheaper renewable electricity to the economy mainly by wind and geothermal.
Mr Mugo added that the new geothermal capacity of 280MW recently commissioned had improved the national installed capacity and enhanced overall system reliability, besides increasing the company’s revenues by 29% from Sh29.96 billion in 2015 to the current level of Sh38.61 billion.
Mr Mugo further pointed out that KenGen is looking forward to produce 720MW at a cost of Sh147 billion whereby he said that they are adding 140MW at Olkaria V at two units in which the first unit will be completed within 24 months and the second unit after 30 months.
Addressing the issue of shareholders’ dividends, Mr Mugo said the firm wouldn’t pay dividends this year because the board had seen an opportunity to invest the dividends in a pipeline project that would see the value of assets go up within a month, hence the value of the dividends as well.
KenGen’s Chairman Joshua Choge said that the company embarked in a restructuring program aimed at strengthening the balance sheet as well as raising equity to fund mega projects which will be concluded in June 2016. The capital will come from a Sh20.2 billion government debt that will be converted into equity and Sh6.4 billion raised in cash.
Speaking at the 64th annual general meeting of KenGen at the Kasarani Stadium, Mr Choge disclosed that the company recorded a revenue of Sh38.6 billion and a pretax profit of Sh11.26 billion, a performance he attributed to revenue from the firm’s 280MW geothermal plants which were commissioned in the course of the last financial year.
The AGM also saw elections being conducted whereby all the Directors were re-elected except for Millicent Omanga who stepped down because she is vying for the Nairobi Woman’s Rep seat.
Soilan Kenana contributed reporting for this article.
The writer is the news editor of the Kenya Free Press