Kenya’s largest electricity generator KenGen said on Friday that it plans to offer a 329 million U.S. dollar rights issue in order fund production of additional electricity.

power grid
power grid

KenGen Chief Executive Officer (CEO) Albert Mugo told an investor briefing in Nairobi that it has began the procurement process of a transaction adviser for the deal.
“We had initially anticipated carrying out the rights issue in June, but it has been pushed to the second half of 2015,” Mugo said. KenGen is 70 percent government owned.
“We are currently talking to the government to see how it will finance its portion of the rights issue,” Mugo said.
KenGen has an installed electricity generation capacity of 1, 575 MW consisting of hydro, geothermal and thermal plants, up from 814 MW in 2008.
KenGen currently generates 79 percent of all electricity produced in the country with the rest coming from independent power producers. Last year, the firm commissioned 280 MW of geothermal power.
“This year we will only add 40 MW of power to the national grid, ” Mugo said. In the next three years, KenGen is targeting to produced 1,015MW additional geothermal by 2018.
Mugo said the firm requires a total of 1.3 billion dollars to finance five major geothermal projects to reach the target, out of which about 50 percent of the funding needs have already been secured.
The CEO said his firm has grown geothermal generation from 17 percent to 40 percent of its electricity portfolio
“This has reduced our reliance on hydro and thermal sources for electricity production,” he said, adding that the move has also improved the firm’s profitability.
“In fact our half year revenue for 2014 grew by 33 million dollar due to switch to geothermal power,” he said.
KenGen Finance Director John Mudany said that the firm has drilled 137 geothermal wells since 2007.
Mudany said that in the past seven years, the firm purchased two rigs and rented five rigs rented, bringing total rigs in operation to eight.
“Currently, it is cheaper to rent the rigs that to the own them, ” he said, adding that negotiations are ongoing for the conversion of KenGen’s Kenya government loans to equity. Enditem

Source: Xinhua


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