Do you report to the Minister of Energy of Kenya?
KenGen is a State Corporation and we are listed in our Securities Exchange. We have shares that are owned by the government and shares that are privately owned. We have more than 190 000 shareholders but the government owns 70% of KenGen.
So the government takes a big interest?
To ensure that they play a role in the governance of the institution, we have directors from the Ministry of National Treasury and from our line ministry, the Ministry of Energy and Petroleum.
Do you have representatives from the private shareholding community on your board ?
Not at the moment because the government, being the biggest shareholder, really influences the election of directors at annual general meetings.
Might you go to market with a greater percentage of shares to increase the private shareholding?
That would depend on the government and how they see the future concerning electricity generation. It is something that can be considered in the future.
But not for KenGen yet?
Not in KenGen yet, but I think that can happen in the future.
And to what degree do you act as a private company?
We operate as a Public Limited Company (PLC) company because at the end of the day we are expected to give something back to the shareholders in the form of dividends.
Is KenGen self-sustaining or does the state bail out the entity?
We are a profitable and self-sustaining organisation. We have consistently generated profits over the years and operate without reliance on state bailouts. Our strong balance sheet enables us to secure financing independently, and we continue to reinvest our own resources to support growth. We target to deliver a return on equity of at least 12.5% after tax on our investments, underscoring our financial health and sustainability.
You are able to get the financing for projects?
Yes, when we need it. Being a state corporation, the development finance institutions (DFIs) would want to lend us money through the government and that has presented a challenge in the recent past because the government’s borrowing has been reduced so they are not able to support us to get concessional loans.
Which technology produces most of the power that KenGen generates?
Our biggest proportion is hydro-electric. Out of the total installed capacity of 1 786 megawatts, 826MW is from hydro and 754MW is from geothermal.
It is important to note that even though we have higher composition of installed capacity from hydro feeding our grid in Kenya, the baseload power is from geothermal, which means that geothermal is given priority in dispatching. We actually get more of our revenues from geothermal, in fact 40% comes from that source.
Would you agree with the author of an article I recently read, that said the Great Rift Valley was going to be the great energy generator of the future?
Yes. Kenya has had geothermal since 1981 and there are now three geothermal sites (fields) generating geothermal power. The potential for geothermal in Kenya is 10 000 megawatts, and we have only harnessed about 1 000 megawatts.
How does that compare to current demand?
Our maximum demand at the moment is about 2 392MW so if we could harness that 10 000, it could actually spur a lot of growth in our economy and our energy generation and we can export it. Because we are soon going to get into power trading in the Eastern Africa Power Pool, a regional pool where we can export our energy across countries.
Why is Kenya a good site for geothermal resources?
Kenya is uniquely positioned for geothermal development because it sits on a “line of fire” along the Great Rift Valley, a tectonically active region with abundant heat close to the earth’s surface. Beneath the ground, large amounts of water interact with the hot rocks and turn into steam. We drill up to three kilometres deep to access this heat and bring it to the surface through the tapped steam to generate clean, reliable power.
Is one of your goals to ramp up geothermal projects?
It is part of our new strategic plan, the Good-to-Great strategy. We are looking at the 10 years to 2034 for our main source of power to be geothermal.
So geothermal is the future?
It is the future. We intend to increase our geothermal generation by 840MW, from the current 754MW, which means we will more than double it. The reason behind that is that geothermal is very stable and consistent.
As long as we ensure that the reservoir is well sustained or maintained, then it means we can harness that geothermal source for many, many years. We have been generating power from geothermal for more than 40 years.
Has Kenya been developing engineers who are specialists in geothermal technology?
We have engineers, we have geologists, we have geochemists, we have geophysicists, all these are skills that are used for geothermal. At KenGen, we have built capacity for the employees in these fields and it is from these expertise we are able to offer geothermal exploration and drilling services beyond our borders. More important are the geoscientists, geochemists and geologists, because these are the people who study the information
from underground.
Are there connections with Iceland, which has such a profusion of geothermal energy?
We collaborate with Iceland under the GRO-Geothermal Training Programme, where we have been sending our teams for capacity building for years. Through this programme, we have had our staff trained at the University of Iceland and Reykjavik University for Master’s and PhD studies.
With the developed capacity, we are now collaborating with the GRO-Geothermal Training Program to build capacity, holding a three-week annual training programme for African countries with geothermal potential to help them kickstart geothermal development in their countries. We are also developing our own TVET-accredited institution, focusing on geothermal, as we have trained and skilled personnel who can share their knowledge with others.
Do you have plans to develop geothermal qualifications?
Yes, KenGen is committed to developing geothermal qualifications. The Geothermal Training and Research Centre, supported by the World Bank, is already operational and has conducted two successful intakes in Geology Technology and Energy Project Management. The centre is designed to build local and regional capacity by offering specialised training, research opportunities, and practical skills development. Currently, it is open for seven diploma courses and 17 short courses.
This ensures we not only advance our own geothermal sector but also position Kenya as a hub for geothermal expertise in Africa.
Do you have partnerships with companies or entities from other countries?
We have done that over the years, for example, we worked with Ethiopia and Djibouti, where we helped them drill over 10 wells for geothermal. We also recently did geoscientific studies in Eswatini. We are in engagements with Tanzania, where we will conduct drilling of exploration wells to help them also access their geothermal potential. Countries like Zambia, which have faced hydrological challenges, are also seeking alternative sources of electricity and energy. They recently engaged us for reconnaissance surveys.
So you are leveraging your expertise?
Precisely, and besides that, most of the projects that we have implemented over the years have been financed by DFIs from Japan, Germany, France and from Africa itself through the African Development Bank. We have also been working with the World Bank.
But when you build a wind farm it’s a KenGen project it’s not joint venture?
In our new strategy we are going to talk about creating Special Purpose Vehicles and we are also going to look at public/private partnerships, so that we can have private investors injecting their equity and resources to help us to develop these projects.
We are open to the idea of collaboration because we require a lot of resources.
In fact, for the 1 500MW that we are talking about would require about $4.3-billion, a huge capital amount. If we cannot raise it through our own balance sheet or support from the government then we can come to you, you bring your portion, we bring in our portion and then we collaborate.
