KenGen raises $246 million in rights issue to fund energy projects in Kenya

KenGen raises $246 million in rights issue to fund energy projects in Kenya Olkaria I Geothermal Plant (Source: Toshiba Press Release)
Alexander Richter 1 Jul 2016

With a recent rights issue, KenGen raised $246 million in new capital to help in financing capital intensive energy projects, among them geothermal projects at Olkaria, Kenya.

In its recent fund raising efforts through a rights issue on the Nairobi Stock Exchange, Kenya Electricity Generating Company (KenGen) has raised Sh 26.4 billion ($246 million), which is a bit short from the target of Sh28.7 billion, or shortfall of about 8 % or about $20 million.

With the rights issue, the company created 4.3 billion new shares in the company, aimed at raising funds to finance its capital intensive power projects in Kenya.

The government, through the National Treasury is the majority shareholder in KenGen with a 70 percent stake and committed to take up its rights in full.  This saw the government pump in Sh20 billion into the firm by converting part of the Sh41 billion debt owed to it into equity.

Analysts estimate that by government converting part of its debt, KenGen will lower its financing costs by 15 percent to Sh2.5 billion.

This left the power producer with quest of only raising Sh8.7 billion, but managed to raise Sh6.4 billion from other shareholders.

KenGen has an installed capacity of 1,611 MW, which it plans to increase to 2,122 MW by 2018 at a cost of $1.75 billion.

Projects lined up by the power producer include three new 350 MW Olkaria geothermal projects, a 400 MW wind farm in Meru as well as rehabilitation of its Olkaria 1 geothermal plant.

Source: CitizenTV Kenya