Kenyan investment firm looking at geothermal power investments in Easter Africa
Drilling crew at Menengai, Kenya (source: flickr/ GDC5000)
Alexander Richter
16 Sep 2013
Kenyan Investment firm Centum is looking at investment opportunities in the Kenya and East African geothermal sector and has founded Mvuke Power as a vehicle for this purpose.
Kenyan investment firm Centum has announced plans to invest into the Kenyan and regional power sector as part of larger business diversification plans. For this purpose the firm as incorporated Mvuke Power Ltd, a subsidiary registered in Mauritius that will hold its investments in power generation and distribution.
Currently the firm’s investments can be found primarily in the beverage, automotive, food, and insurance sectors. The firm sees huge growth opportunities tin the capital intensive power industry.
“We are eyeing the local geothermal projects in the short term but are also open to invest in other power ventures across the region.”said Chris Kirubi, a director of Centum. Mr Kirubi added that the size of investments in the power sector would depend on the specific projects to be undertaken.
Centum is expected to back the projects financially either through equity stakes or loans.
So far private investments in power generation have been dominated by foreign firms with deep pockets to finance the capital-intensive ventures in the region.
The government is also spending billions of shillings to generate more power and hook a larger portion of the population to the national grid, opening opportunities to financiers, engineers, and suppliers of power cables and equipment.
The power generation and distribution are carried out by State-owned firms Kenya Power,KenGen, Geothermal Development Company, and the Kenya Electricity Transmission Company (KETRACO) along with a number of Independent Power Producers.
Centum will join Transcentury, another investment firm, which has increased its stake in the power sector where it draws a large part of its earnings.
Transcentury serves the power sector mainly through its subsidiary East African Cables (EAC) that supplies electric cables and other equipment to regional utility firms, including Kenya Power.
Expansion of electricity penetration is set to benefit firms like Centum by providing more opportunities for them to invest in power generation and distribution.
Transcentury is working in a consortium with Cluff Geothermal, Siemens, Reykjavik Geothermal, Mirabaud Securities and SKM, and others in Kenya. ”
