KenGen considers JVs for financing of $12 billion 585 MW development in Kenya
Olkaria III geothermal plant, Kenya (source: emerging africa fund)
Alexander Richter
23 Feb 2012
KenGen is open to various possibilities to finance its investment needs of up to $12 billion for the development of new geothermal capacity of 585 MW until 2017. JVs and other options are being looked at, while a rights issue might not be in the books for now.
News from Kenya report an ambitious investment target by Kenya Electricity Generating Company (KenGen) of $12 billion. The company plans to raise that money to build six geothermal power plants with a total power generating capacity of 585 MW.
The company is open, so its Managing Director Eddy Njoroge, to different models to raise the necessary financing.
“We will be looking at different options like joint ventures …The most viable one is build and transfer. We have the steam, we want somebody to come and build the plant and then operate it (to recover the cost) and then transfer it to us.”
He said drilling to reach the steam was a major problem in building geothermal power plants, but the company was planning to hire new rigs and buy some more.
Mr Njoroge said KenGen would not consider a rights issue because the market was bearish.
“Part of the problem of a right issue right now is that the market has been very bearish. We may not get the proper value of the stock. A bond of course goes to our balance sheet since it’s a borrowing,” he said.”
Source: Reuters via Business Daily Africa
