KenGen to seek $174 Mln from shareholders
16 January 2014, 08:37
Nairobi - KenGen plans to raise 15 billion shillings from its shareholders in a rights issue offer this year, its chief executive said on Wednesday.
The state-controlled firm, which has 1,250 megawatts of generating capacity out of the country's total of 1,600 MW, will use the funds to develop several new power plants as part of the government's plan to raise installed capacity to 5,000 MW by 2017.
"Looking at the very ambitious plan we have for generation in the power sector, we need the money. We need the equity that will also help us raise more debt and maintain our capital structure," Albert Mugo, told his first news conference since his appointment.
Mugo, who replaced veteran chief executive Eddie Njoroge who left last year, said they prefer a 70 to 30 debt to equity capital ratio. KenGen may consider selling a stake to a strategic investor if there is a need to raise more capital after the cash call, he added.
The firm still requires regulatory approval for the rights issue plan that it hopes will be ready to go by June, Mugo added.
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.