The Kenya Electricity Generating Company (KenGen) has defended its rising debt levels which have surged to 150 billion shillings (about 1.475 billion US dollars), constituting 55 per cent of its total assets.
KenGen Managing Director Albert Mugo said here Monday that although this was still below the advisable cap, the firm had embarked on reducing the figure as it embarked on other ventures by converting up to 20.1 billion shillings of loans owed to the government into equity while increasing steam sales to boost revenue.
Of the country’s current installed capacity of 2,150 megawatts (MW), KenGen has the largest share at 1,618 MW, or 70 per cent of the total, while independent power producers (IPPs) share the remaining 30%.
Between this year and 2020, the power producer targets to raise its capacity by an additional 720 MW at a cost of 200.5 billion shillings in the medium term.
Intensive power generation has seen the company take on 150 billion shillings in total debt, mostly in foreign currency, with an average maturity period of 15.4 years and at an average interest cost of 4.09 per cent.
Direct loans constitute 37.7 billion (25.2 per cent), government guaranteed loans 42.8 billion shillings (28.5 per cent) and government on lent-loans at 69.5 billion shillings (46.3 per cent).
It is the last portion that the firm is looking to converting into equity.
KenGen is also eying the securities market with a 20.2 billion shillings rights issue slated for June.
This comes as the firm records a revenue jump of 52 per cent to 18.5 billion shillings for the year ended December 2015 from 12.2 billion shillings the previous year, driven by the addition of 280 MW from its Olkaria power plant to the grid as total assets surged 4.0 per cent to 355 billion shillings.
The firm now eyes direct steam sales to large consumers in Naivasha.
Its profit before tax also went up 121 per cent to 8.4 billion shillings, up from 3.8 billion shillings in 2014.