Kenya Electricity Generating Company plans to raise funds from the market, may opt to issue green bonds

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The Chief Executive Officer of the Kenya Electricity Generating Company (KenGen), Rebecca Miano said the company plans to raise funds from the market later this year and it may opt to issue Kenya’s first green bond.

KenGen, which has a 1,631 megawatt annual capacity, supplies 70 percent of the East African nation’s electricity. Private investors hold 30 percent of the company while the rest is held by the state.

Miano noted that the company would go to the market once it redeems its 10-year, 25 billion shillings ($250 million) bond in October. The bond was heavily oversubscribed when it was issued in 2009.

During an interview with Reuters, Miano said “our finance people are burning the midnight oil to look at the possibilities”, but she did not give a figure for the target amount.

The Chief Executive Officer revealed that “the team is looking at asset backed securities, they are also looking at green bonds”. Green bonds help to finance projects in the renewable energy, energy-efficiency, green transport and wastewater treatment sectors.

Kenya’s capital markets regulator will pave the way for the first issue of green bonds, by unveiling regulations for private issuance of green bonds next week.

Miano noted that although Kenya has high consumer electricity tariffs compared with countries like Egypt and South Africa, the government’s policies had boosted investment in the sector. She said the policies have helped the country avoid blackouts or schedule cuts.

According to her, “Kenya was among the first countries in Africa to liberalise generation and it has its own advantages. You have many players and it brings competition… you have adequate power”.

KenGen has shifted its strategy in recent years to focus on renewable energy in order to reduce the risk posed by its hydro generation dams, which are normally susceptible to a drop in production when the rains fail.

Miano revealed that geothermal steam, hot underground steam found in the Rift Valley which is used to drive turbines for electricity production, accounts for nearly a third of the firm’s annual production. She said “our geothermal-led strategy is bearing fruit”, and noted that the company was developing capacity for an extra 720 MW in the next four years to 2022.

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