According to Energy and Petroleum Permanent Secretary Joseph Njoroge, the negotiations between KenGen and the government – which is the majority shareholder – “are in the last stages and the outcome will be known soon.”
Assuring shareholders during the 62nd Annual General Meeting, Njoroge said the Rights Issue had taken long, considering that government uptake of its rights was critical to the success of the transaction as well as gauging the market appetite for the shares.
“We are in the final stages of getting the necessary approvals (for the Rights Issue). By the end of the first quarter next year, we will have kicked off the process,” the PS assured.
KenGen targets to raise a total of Sh30 billion, with Sh15 billion coming from the rights issue while the rest through government means, yet to be decided.
“The figures of what we want to raise have not changed. The Sh15 billion is what we expected to get as cash from other shareholders, because the government will take its rights and in the various ways it is looking at. But combined we could go all the way to Sh30 billion,” KenGen Managing Director Albert Mugo said during the AGM.
The Rights Issue is expected to finance new projects comprising mainly a mix of geothermal and wind energy, to boost KenGen’s power generation capacity in the next three years.
“We have now commissioned 280MW at Olkaria. Our next project is Olkaria IV, Olkaria VI, Olkaria VII, up to VIII and even Olkaria I, unit six which has 70 MW. In addition to that, in about two to three years, we are planning to have some 100MW of wind,” Mugo explained.
The company also hinted plans to venture into solar power in future once feasibility studies currently being undertaken are complete, but reiterated that its key focus was on renewable energy.
“We have been conducting studies to see where we can develop solar energy in future. But this depends on availability of technology to enable us do so at least cost. However, our focus for now remains on exploring geothermal and wind,” Mugo said.
Meanwhile the company sought to assure investors that ongoing investments in increasing generating capacity would translate into higher dividends.
“Profits are lagging behind the heavy investments we are currently undertaking. But we expect to see higher returns in the form of dividends to shareholders once the projects we are currently undertaking start generating revenue. The impact will be seen in the bottom line starting this financial year 2014/15,” KenGen Chairman Joshua Choge assured.
Shareholders approved dividends of Sh0.40 per ordinary share at the AGM.
Last week, KenGen announced that it has connected the entire 280MW from the Olkaria IV and Olkaria I (additional units 4 and 5) to the national grid.