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Published On: Fri, Nov 6th, 2020

KenGen Annual Report Shows Growth Despite Adversity

KenGen Registers Growth Despite Adversity

Despite worldwide social and economic volatility, KenGen, East Africa’s top energy generator, continues to register stable performance. This is significant as it paints a promising picture of Kenya’s future economic landscape and of how integral renewable energy is towards economic development.

At the end of August 2020, KenGen released its annual integrated report to announce performance and future prospects to shareholders and stakeholders. The company’s financial report for the year ended 30 June 2019 gives an overview of the company’s operational, economic, social, environmental, and financial position. The report also discloses KenGen’s risks and opportunities.

According to Outgoing Chairman Joshua Choge, the firm’s performance was in line with the country’s GDP growth for the period under review. Whereas the Managing Director and CEO, Rebecca Miano, was also optimistic about the company’s expansion and Kenya’s economic climate. Mrs. Miano highlighted an increase in energy sales and revenue despite new entrants diluting the company’s market share. She contends that KenGen performed well even in the face of the pandemic and higher taxes imposed by the Finance Act of 2020.

photo/Gerd Altmann

Dealing with COVID-19

With the pandemic completely disrupting the global economy along with supply chains and industries buckling under pressure, KenGen has continuously conducted risk evaluations and implemented mitigation measures backed by a robust continuity plan geared towards the wellbeing and safety of employees, stakeholders, and local communities.

Although the pandemic has affected demand and energy consumption payments, KenGen continues on its quest for capacity expansion and diversification. To ensure financial sustainability, KenGen is keen on capital conservation and cost-management measures while keeping an eye on liquidity.

The energy generator has also made efforts to provide financial backing to local communities to sustain livelihoods during the pandemic. KenGen has contributed over $350,000 to pandemic-related causes through the COVID-19 National Response Fund in collaboration with county governments. These funds were allocated to local communities for emergency relief provisions, including food, water, soap, and sanitizer. KenGen employees raised a further $900,000 towards COVID-related initiatives.

The Impact of the 2020 Finance Act

In June 2020, the Finance Act took effect with major implications for KenGen including monthly taxation on at least 1% of its turnover. The Finance Act also drastically changed how VAT is governed in Kenya consequently withdrawing VAT exemptions previously applicable to some of KenGen’s inputs for wind and solar energy projects. The Act also withdrew VAT exemptions on Import Declaration Feed and Railway Development Levy, thus directly affecting the import of materials for geothermal projects. Nevertheless, KenGen remains set to continue delivering sustainable long-term value to stakeholders and shareholders. As it continues to work on developing a range of sustainable clean energy projects, the global geothermal leader is still advancing strongly towards a future where clean energy is the norm.

Normalizing Clean Energy

Kenya has been attempting to increase its current 7% forest cover to an average of 10% by 2030. KenGen recognizes the importance of this undertaking and has been contributing millions of tree seedlings to local communities. The company is also involved in several undertakings in its drive to make clean energy the norm. These include the exploration of floating solar panel plants in the basins of hydroelectric dams in order to reduce dependence on conventional oil/coal-fired power plants and to reduce carbon emissions.

Towards A Sustainable Ecosystem  

KenGen has demonstrated a commitment to economic, social, and environmental care through undertakings around Sustainable Development Goals (SDGs). Its initiatives are part of a drive to see Kenya and East Africa achieve energy security through competitively-priced, safe and reliable energy. Current projects in the pipeline will positively impact other aspects of the economy as affordable energy is an enabler of all 17 SDGs. 

Author: Nataliya Stefanus

 

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