KenGen earns Sh27.6m from managing power firm Aggreko

Kenya Electricity Generating Company (KenGen) earned Sh27.6 million in the financial year to June 2016 from managing Aggreko’s emergency power, the most expensive form of energy.

The revenue is disclosed in the power generator’s latest annual report, which also shows that the management income grew 11 per cent from Sh24.9 million a year earlier.

KenGen earns ¢0.75 (Sh0.75) per kilowatt-hour in management fees for all the temporary power generated by Aggreko in Muhoroni and Garissa, according to the State-owned firm.

The two Aggreko emergency power plants have since been shut down. The 30-megawatt Muhoroni generator was switched off on July 13 while the temporary 3.4-megawatt Garissa generator was unplugged two months earlier.

“During the year the company managed an emergency power supply project known as Aggreko international projects as an implementing commissioning agent on behalf of the Ministry of Energy and Petroleum,” said managing director Albert Mugo in the 2016 annual report.

The firm was tasked to manage the costly emergency power projects because Aggreko does not hold a valid electricity generation licence, Mr Mugo said in an earlier interview.

READ: KenGen bags Sh889m in ten-year Aggreko power deal

The latest disclosure means KenGen has pocketed Sh916.6 million in fees for managing Aggreko’s expensive emergency power projects over the last decade, official data shows.

The earnings paint the mixed fortunes of emergency power; saddling homes and manufacturers with high power bills, but generating income for the listed power producer.

Emergency power is priced as high as ¢50 per kilowatt-hour, which is more than double the cost of diesel-fired electricity set at ¢20 per kWh. Aggreko has pocketed more than Sh12 billion in electricity sales over the past decade, in supplies to retailer Kenya Power.

The Glasgow-based temporary power firm presently has no running State contracts in Kenya following the expiry of the costly Muhoroni and Garissa deals.

The Aggreko Muhoroni plant was replaced by a 30-megawatt gas turbine owned and operated by KenGen. Garissa was finally connected to the grid in May this year, hence no longer dependent on the Aggreko generator.

Kenyan households and industries consumed 0.8 million kWh of Aggreko’s emergency power in July, the last month temporary power was fed to the gird, according to official data.

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