Kenya Electricity Generating Company (KenGen) plans to raise Ksh15 billion (US$ 174 million) from its shareholders in a rights issue offer this year.
The funds will be used to develop several new power plants as part of the government’s plan to raise installed capacity to 5,000 MW by 2017. The state-controlled firm has 1,250 MW of generating capacity out of the country’s total of 1,600 MW.
Speaking during his first news conference since his appointment, KenGen’s chief executive, Albert Mugo, said with the ambitious plan they have for generation in the power sector, they need the money adding that they need an equity that will also help them raise more debt and maintain their capital structure. Mugo said they prefer a 70 to 30 debt to equity capital ratio. He added that KenGen may consider selling a stake to a strategic investor if there is a need to raise more capital after the cash call.
The firm still requires regulatory approval for the rights issue plan that it hopes will be ready to go by June. Kenya, which faces frequent black-outs due to generation shortfalls and an ageing grid, hopes to cut power costs by 40 percent in the next few years.