KenGen’s Ethiopia earnings grow four times to Sh1.7bn

Kenya Electricity Generating Company earnings from the new Ethiopian operations quadrupled from Sh440 million last year to Sh1.7 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.

KenGen said in its annual report the costs associated with the drilling of wells in Tulu Moye were Sh1.3 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 Sh7.6 billion due cost 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 Sh1.5 billion to Sh1.8 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.

The firm also plans to start drilling services for the Aluto-Langano project — also in Ethiopia and has signed a Sh709 million contract to drill three geothermal wells in Djibouti.

It said it is eyeing similar deals in Uganda, Tanzania, Djibouti, Rwanda, South Sudan, The Sudan, Zambia and Comoros to boost revenues.