KenGen’s bond result unravels Kenya’s inequality

In light of the 11 per cent oversubscription, the allocation policy for the institutional investors was reviewed.

All investors in the institutional pool will receive their bond allocations in full up to Sh20 million.

While investors who applied for an allocation above this amount will be allocated the remaining balance on a pro rata basis of 91.5 per cent.

Investors in the retail investment pool which was under subscribed by Sh600 million against an allocation Sh5 billion will receive their full allocations.

Unlike in other offers of this scale, this will be the first time where investors of moderate means will get the full allocation of shares they had applied for.

All refunds where applicable will be processed through EFT (Electronic Funds Transfer) from November 2.

KenGen says this will affect 114 institutional investors all of whom had applied for bond allocations of above Sh20 million.

The investment in additional power generation capacity through the PIBO is part of KenGen’s five-year strategy (2008-2012) of increasing its power generation capacity by 500 MW to stabilise the power situation in Kenya.

KenGen proposes to increase its generation capacity by 528.6 Megawatts (MW) within the next four years (1 July 2009 to 30 June 2013) and 1,635 Megawatts between 1 July 2013 and 30 June 2019.

Therefore, this will result in an expansion of the Company’s electricity generation by 2,163.6 MW within nine years.

This power generation firm hopes that the expansion will give boost its power capacity to cope with the rising demand, anticipated at eight percent annually.

According to KenGen, the projects being implemented and commissioned within four years to 30 June 2013 are categorized as Horizon 1 Projects while those being commissioned from this date up to 2019 are referred to as the Horizon 2 Projects.