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Following positive results on revenue collection from services other than the sale of electricity production, KenGen seeks to increase its product scope.

In East Africa, the Kenya Electricity Generating Company (KenGen) has publicly declared that it is considering further expansion on its non-electricity revenue collection by offering consultancy services, increasing steam sales and leasing out drilling equipment.

KenGen’s finance director, John Mudany, confirmed the news, adding that the power utility is looking to further strengthen its non-electricity revenue, currently standing at 23% of total revenue, to about 30%, Thomson Reuters Foundation reported.

It is reported that geothermal steam has been the key driver to the power utility’s non-electricity income, which contributed Sh6.8 billion ($67 million) in the financial year ended June.

KenGen anticipates revenue increase

KenGen chief executive Albert Mugo, highlighted: “Last year we made close to Sh1.5 billion ($14 million) from just drilling. We expect to see revenues increasing from this source.”

Mugo continued: “We are concentrating a lot on diversification and definitely on the days to come – from consultancies, from drilling and also from steam – we’ll see more money coming in.”

Thomson Reuters reported that KenGen also sells geothermal steam to neighbouring flower farms in Naivasha, situated in the Nakuru County, which requires the steam for heating and also to run their small power plants.

The power company also expects to sell steam to industries set up in the planned Naivasha industrial park.

Consultancy and drilling services

It is reported that the company has three drilling rigs, which it has hired out to geothermal development company Akiira Geothermal Ltd.

Mugo said they are seeking more opportunities for consultancy and drilling services in the region.

The consultancy services involve feasibility studies conducted before actual drilling of the geothermal wells, of which KenGen conducts these studies to determine the steam quantity likely to be yielded.

Mudany noted that: “All these studies that you need before you put your money down, we have that skill and that is what we are selling.”

According to reports, the diversification of revenue by KenGen is linked to the increasing competition in electricity sales as more independent power producers enter the market.

 

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