By Antonio Ruffini
24 June 2013 - Outgoing managing director (MD) of Kenya Electricity Generating Company (KenGen), Edward Njoroge, has received a lifetime achievement award for his impact on the electricity utility sector in Kenya.
The award was presented to Njoroge at a ceremony during the Africa Energy Forum (AEF) convention that is took place between the 18th and 20th of June 2013. This recognition coincides with Njoroge stepping down as MD of KenGen at the end of June 2013, having filled that role for a decade.
Njoroge played a major role in the evolution of Kenya’s electricity sector, which has undergone restructuring and privatisation over the recent years. A pivotal moment for the country’s electricity sector was the floating of the formerly fully state-owned generation company, KenGen, on Kenya’s stock exchange. This took place in May 2006.
Njoroge describes the listing of KenGen as one of the highlights of his career. “The public listing achieved its objectives, one of which was to have a wide public ownership of the utility.” KenGen has some 275,000 shareholders, mostly small private investors, the largest single holder accounting for 2% of the 30% publically held portion of the company. The government of Kenya retains a 70% holding in KenGen. “As a publically listed company KenGen is pushed to deliver because the shareholders have high expectations,” Njoroge says. The company’s first annual general meeting after its listing drew 20,000 shareholders and was held at a national stadium in Kenya.
“When I took over as MD at KenGen it was a typical parastatal, very operational in its thinking.” Njoroge was able to change the mind-set at the utility, to enable it to think more strategically, and turned it into a more performance driven result oriented and focused organisation. As a result it was able to execute and deliver a thermal power project in 14 months, something that had taken seven years previously.
On a broader level, Njoroge has helped drive the unbundling of Kenya’s power sector. “Many countries wrestle with whether electricity sector unbundling is desirable. From my perspective, unbundling in Kenya was a good decision,” Njoroge says. “It enables companies to focus on their key mandates. If you have a company that does nothing but transmission, it helps it focus more on what needs to be done in that subsector. Similarly for the other subsectors.” To that end Kenya set up the Geothermal Development Company which is helping drive progress in geothermal energy in the country. Similarly, Kenya has a separate Rural Electrification Authority, which is funded by government. The country has set up an independent energy regulatory commission whose members have security of tenure. “On a regulatory front, Kenya has done well,” Njoroge says.
Njoroge believes one of the major breakthroughs for the country was when the government realised it had to put its own money into the electricity sector. “This was a major shift in thinking, as Kenya was too dependent on the development finance institutions (DFI). When I joined KenGen this was the case. With a dependence on the DFIs comes long approval process timeframes even for pre-feasibility studies.”
While Njoroge is retiring from KenGen, he will remain involved in the energy sector, probably outside Kenya but focused on Africa. “I am challenged by the huge gap between supply and demand for power not only in Kenya, but in Africa and want to play a role in closing this gap.”
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