Kenya Electricity Generating Company (Kengen) earnings from the new Ethiopian operations quadrupled from Kes 440 million last year to Kes 1.7 billion in the year ending June 2021.
The firm’s diversification venture that includes drilling in Tulu Moye in Ethiopia contributed revenues that surpassed the expenses of setting up.
In its annual report, the electricity generating company said the costs associated with the drilling of wells in Tulu Moye were Kes 1.3 billion. Ethiopia operations increased the costs of staff, plant operations, and maintenance as well as drilling.
KenGen has been strategic in its plans for business diversification for a long time, setting sights on new markets for its geothermal business and looking to turn byproducts into money-making enterprises.
“Employee expenses increased by 8.5 percent to Kes 7.6 billion due costs for staff engaged in the drilling operations in Ethiopia and implementation of Collective Bargaining Agreement (CBA), and gratuity for personnel on contract terms,” KenGen said.
“The plant operation and maintenance expenses increased from Kes 1.5 billion to Kes 1.8 billion because of expenses related to drilling in Ethiopia,” the firm said. It has been diversifying revenue streams away from producing electricity and selling to Kenya Power, supplying drilling services to Ethiopia and Djibouti.
Kengen also stated they plan to start drilling services for the Aluto-Langano project — also in Ethiopia and has signed a Kes 709 million contract to drill three geothermal wells in Djibouti.
It said it is eyeing similar deals in Uganda, Tanzania, Djibouti, Rwanda, South Sudan, Sudan, Zambia, and Comoros to boost revenues
In the year ahead, we aim to deliver Olkaria I Unit 6 geothermal power plant, which will add 83.3MW to the national grid. KenGen will continue to progress the milestones towards the commencement of the Olkaria VI, Olkaria VII Geothermal power plant, and the 45MW Olkaria I Rehabilitation projects. We are on course with our diversification program for other revenue streams including drilling services, consultancies, Carbon Credits, and the Geothermal Training Centre.
The Board recommended a first and final dividend of Kes 0.30 for the year 2021 per ordinary share which amounts to Kes 1,978 million