Nairobi, Kenya — ESI-AFRICA.COM — 13 January 2011 – Kenya Power and Lighting (KPLC) “’ the country’s sole power distributor “’ will lean on soft financing and may turn to the bond market, its chief executive said after unveiling the results of a 9.5 billion shilling (US$120 million) cash call.
Reuters reports that energy utilities in the east African nation rely on concessional financing from institutions like the World Bank to meet massive capital requirements, following decades of underinvestment in the sector.
KPLC has just raised 9.8 billion shillings (US$121 million) in a rights issue aimed at upgrading the national grid, representing a 103.17% subscription rate for the offer.
“Because of our improved balance sheet and because the government is a major shareholder, we should be seeing a lot of resources coming from very soft lenders like the World Bank and other multi-lateral lenders,” chief executive Joseph Njoroge told Reuters.
“To complement all those resources, we can comfortably go for a bond issue because our balance sheet has improved. We will explore all available channels for raising funds,” he added.
The cash call was the final step in the restructuring of Kenya Power’s balance sheet, which started with redemption of the government’s preference shares and an eight for one share split.
During the process, the government’s shareholding initially rose to 69.7% from 40%, before falling to a stake of 50.1%, after it had sat out the rights in line with its policy of cutting its involvement in public enterprises.
Njoroge said the company would also study the possibility of cross-listing its shares in the rest of east Africa. A few Kenyan firms are also listed on the Dar es Salaam and Kampala bourses, as well as the Kigali market, in line with growing regional ties.
“Even though the current drought is itself a setback, we see a very successful financial year ending 30 June 2011,” he added. “The economy is picking up, and we have seen a rise in demand for our electricity,” he said.