The earnings were booked by KenGen Ethiopia — a branch set up by KenGen in 2019 to facilitate the execution of commercial consultancy and drilling services contract signed with Tulu Moye Geothermal Operations.
KenGen managing director Rebecca Miano made the disclosure in the latest annual report, adding that the firm also plans to start drilling services for the Aluto-Langano project — also in Ethiopia.
Kenya Electricity Generating Company #ticker:KEGN (KenGen) has booked Sh440.34 million revenue from drilling geothermal wells in Ethiopia, offering a boost to its earnings.
The earnings were booked by KenGen Ethiopia — a branch set up by KenGen in 2019 to facilitate the execution of commercial consultancy and drilling services contract signed with Tulu Moye Geothermal Operations.
KenGen managing director Rebecca Miano made the disclosure in the latest annual report, adding that the firm also plans to start drilling services for the Aluto-Langano project — also in Ethiopia.
“The company enhanced its revenue diversification venture through drilling services in Tulu Moye, Ethiopia. The new venture has injected additional revenue of Sh440 million in the year,” said Ms Miano.
The Nairobi Securities Exchange-listed firm in 2019 won the Sh5.2 billion tender to drill geothermal wells in Ethiopia, marking the second such win in the landlocked country.
KenGen had also in February 2019 won part of a Sh7.6 billion contract to supply geothermal drilling services to the Ethiopian Electric Power (EEP).
The firm has been diversifying revenue streams away from the traditional business of producing electricity and selling to Kenya Power, in a bid to boost profitability.
geothermal wells
Last February, the firm signed a Sh709 million contract to drill three geothermal wells in Djibouti. It is also eying similar deal in Rwanda.
KenGen last October opened a search for a consultant to help in designing and setting up a commercial data centre for housing servers, network and storage systems of local and international firms at a fee.
The planned project comes at a time KenGen is setting up a geothermal drilling detergent manufacturing factory that will see it stop importing the commodity and make savings.
Other projects in the pipeline include commercial treatment and bottling of drinking water following the commissioning of the Gitaru Water Drinking Plant and the KenGen Calibration Centre.
KenGen net profit for the financial year ended June 2020 jumped 133 per cent to Sh18.38 billion — the highest in the company’s history — on the increased output of cheaper geothermal and tax saving.
The electricity producer received a tax credit of Sh4.59 billion from the Kenya Revenue Authority during the period, in contrast with the preceding year when it had paid Sh3.79 billion.
KenGen controls 64 per cent of the electricity generation market share with an installed capacity of 1,803 megawatts.
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