A tour to Olkaria, organised by Kenya Electricity Generating Company Limited (KenGen) for some of its 300 shareholders proves biggest entry point to educate the masses. The lucky lot, who were selected through a raffle draw in November, garnered much needed exposure and had the privilege of seeing a drilling rig, wellheads and the recently completed Olkaria IV in real-time, which together with Olkaria I Additional Units (AU), produce 280MW of geothermal power.
The tour is one of KenGen’s initiatives to enhance shareholders’ capacities by increasing their knowledge of the business and strategy as well as the company’s achievements and challenges. The aim is to expose stakeholders, as they need to know where their money goes.
“In addition to touring the recently commissioned 280MW project, the shareholders will also get a brief on planned projects, including the proposed generating stations, the much awaited Industrial Energy Park and the Mixed Use Housing Development Project,’’ said KenGen Managing Director Albert Mugo.
As KenGen powers a 208% rise in its net profit to Sh11.5 billion for the financial year ended June 30, 2015 from Sh2.8 billion last year, there is a tremendous stride in the corporation’s growth. The 280MW has been cited as one of the single largest geothermal power projects in the world and has had an impact on KenGen’s financial performance, pushing the company’s profit to Sh11.5 billion. Another milestone is that geothermal projects have brought down the cost of power from 25% to 30%. It has also placed Kenya on the map as the largest geothermal power producer in Africa and the 8th in the world.
“Taking our shareholders to our installations will contribute greatly to enhancing their knowledge and experience, thereby empowering them to make impactful contributions during AGMs and other investor forums,’’ said KenGen Chairman Joshua Choge.
The first tour in 2011 saw 300 shareholders visit the Seven Forks hydro stations. In 2012 another 300 shareholders were taken to Olkaria to acquaint with the electricity generator’s geothermal expansion program.
Growth crossings
KenGen produces nearly 80% of electricity consumed in the country. The company, which is listed at the Nairobi Securities Exchange (NSE), utilizes various sources to generate electricity ranging from hydro, geothermal, thermal and wind. Hydro is the leading mode with an installed capacity of 819.9MW, which is 51% of the company-installed capacity. Geothermal comes second with 453.4MW from large plants and another 55.6MW from the innovative wellheads technology raising geothermal capacity to 509MW equivalent to 32% of the total capacity.
However, with the commissioning of the 280MW Geothermal project in Olkaria, geothermal now accounts for more than 50% of the electric energy consumed by Kenyans. The energy contribution is higher than the installed capacity because the geothermal power plants operate at full load for longer than 90% of the time. This has enabled Kenya as a whole to reduce the fossil fuel consumption for power generation in the thermal plants. This has resulted in significant reduction in the fuel bills, which benefit is being passed to customers.
Every month presents a more tangible example of how Kenyans are awakening to the high cost of electricity. And despite the fact that we have geothermal, which has been the biggest transformation of the last decade, concerns are rife that the cost is still high.
People familiar with the changing energy trends, though, believe that when investors are aware of the goings on in the energy sector, and are well informed, they will look far in terms of opportunities that they have and not dwell much on why the cost is high or low.
