Increased power generation to boost KenGen profits in second half of 2016/2017

pahh7nkbotejufij58bd4e2a278bd Increased power generation to boost KenGen profits in second half of 2016/2017

KenGen Managing Director, Eng. Albert Mugo

Kenya Electricity Generating Company (KenGen) expects to boost its profitability in the second half of the year as a result of increased electricity generation and diversification of revenue streams.

The electricity generator has said its performance for the remaining period to June 30, 2017 will improve following completion of the evacuation line for the wellheads and fixing of machine breakdowns which affected some power plants.

Speaking at an investor briefing on the company’s performance, Managing Director, Eng. Albert Mugo, disclosed an additional 5MWof geothermal energy was connected to the grid from its innovative wellhead programme in December 2016.

“This is a milestone achievement that will see the company’s good run in performance continue as all the wellhead plants totalling 15 in number have been connected to the main grid. This is definitely good news regarding our wellhead power generation journey and revenues since we commenced the pilot in 2009,” said Eng. Mugo.


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The wellhead early generation units is a KenGen innovation that ensures electricity generation from the wells before a main power plant is put up.  The technology, which entails use of small power units  fitted next to the wells, ensures generation can take place within as little as nine months from the time the well is tested. The main power plants usually need up to 5 years before power can be generated using an interconnected well system, feeding steam into a high capacity power plant.

The Company also expects to begin construction of Olkaria V geothermal power station in the third quarter pf 2016/17 financial year.

The project to be funded by the Japanese International Cooperation Agency (JICA) to a tune of Sh40 billion will inject an additional 158MW to the national grid. It involves construction of two geothermal power units of 79MW each.

Eng. Mugo said the company is committed to ensuring resources are put in place to drive implementation of its business development strategy to meet growth in demand of electricity and enhance return for shareholders.

The company’s interest income increased from Sh289 million in December 2015 to Sh632 million in December 2016 due investment funds raised during the Rights Issue in June 2016.

“The Rights Issue funds are awaiting the implementation of projects in the pipeline,” he said.

The company, however, posted 17 percent drop in profits for the Half Year period ending December 31th 2016 following poor performance in the non-traditional revenue streams. The profits before tax decreased to Ksh6,566 million from Ksh8,384million while profit after tax dropped to Ksh4,625million from Ksh5,653 million in 2015.


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According to Eng. Mugo, the results were impacted by the decommissioning of Garissa, Lamu and Embakasi Gas Turbine Thermal power plants and pending receipt of revenue from commercial drilling services.

“Although the decommissioned plants reduced our revenues in this interim period, we expect to deepen use of renewable energy in the grid to the benefit of electricity customers and new industrial investors since these power plants used expensive fuel to run. This has no doubt helped the country manage the use of thermal power plants during this period of drought,” he said.

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