KenGen to seek $5.5 bn in debt and equity funding
An engineer releases steam at the two main pips at the KenGen Geothermal Energy Power station in Naivasha, some 117km (73 miles) from the capital Nairobi, January 12, 2009. Geothermal energy is the natural heat stored within the earth's.The energy is manifested on the earth's surface in the form of fumaroles, hotsprings and hot and altered grounds. To extract this energy, wells are drillled to tap steam and water at high temperatures (250-350 C) and pressures (600-1200 psi) at depths of 1-3km for electricity generation, the steam is piped to a turbine, which rotates a generator to produce electrical energy. The station produces the bulk of geothermal power produced in Kenya. REUTERS/Antony Njuguna (KENYA)
Francisco Rojas
26 Nov 2013
There is a plan to expand Kenya's National Electricity Grid by 5,000 MW in the next 40 months, multiplying by 3 the current installed capacity of the country.
KenGen’s acting managing director Simon Ngure said the company has planned to raise the money both through debt and equity
He said KenGen was likely to go back to its shareholders through a rights issue to get 30 per cent of the required amount from the bourse.
“KenGen needs to look for additional financial resources — in the region of $5.5 billion — in the next 40 months when we expect to be undertaking various projects. The debt component will be 70 per cent while the rest will be equity,” said Mr Ngure.
At the beginning of the current year KenGen had announced that it would be issuing a 20-year bond, backed by its assets, that would allow the firm to acquire more capital to further invest in more projects.
Out of the 5,000 MW that the Government has allocated as target, KenGen is expected to cover 2,500 MW, via joint ventures and partnerships with interested parties.
On a very positive note, the company reported that there was a “86 per cent growth in net profits to Sh5.2 billion during the year to June 2013, helped by a Sh1 billion tax credit the company received for investment in four power generating plants completed during the period.” Bearing in mind this positive results, it is expected that the company can raise the aforementioned capital.
Via the aforementioned 5,000 MW plan, the Government is planning to multiply by 3 the total installed capacity in order to meet the demands of growing population need’s for energy.
Source: Daily Nation Kenya Website
