, NAIROBI, Kenya, Mar 6 – Kenya Electricity Generating Company (KenGen) has posted an 18 percent drop in their first half net profit that ended December 2016 to hit Sh4.6 billion from Sh5.6 billion in 2015 attributable to poor performance in the non-traditional revenue streams.
KenGen Managing Director Albert Mugo says 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 explains.
The company’s interest income however 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 firm 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 sees improved performance following completion of the evacuation line for the wellheads and fixing of machine breakdowns which affected some power plants.
Mugo, disclosed an additional 5Megawatts (MW) of 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 Mugo.
The construction of Olkaria V geothermal power station is expected in the third quarter of 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.