One should look at this company as a very long term investment. As someone put it, this should be a 20 - 30 year plan.

I am surprised that pension schemes are not going for it.

Pension schemes exist to generate competitive returns for members during their working life. In as much as Kengen looks like it will make money eventually, the funding of their perpetual investment program disillusions pension schemes. Rather stick with firms that can generate decent tangible returns year on year rather than one which will provide a huge tangible return from year N out there in the future. Not all members will retire after year N. There are some retiring next year and in 5 years time. Not sure how much Kengen will have lost or made by then, but I am certain KCB is likely to have consistently made a decent return up until then. Kengen need to fix their financing and start operating like a business answerable to a diverse set of players and NOT like a project management company answerable to Vision 2030 and GK.

Which they said they are being offered at 1%

So who will consume all the power? We are yet to feed ourselves and medicate and treat ourselves to a decent standard. The economy is growing at 3- 5 % at best and is unlikely to move beyond that over the next 3 years, so what is all this capacity for?

@murchr our deficit is 350MW at the moment. Which 1260MW peak demand against 1290MW installed capacity and the 30% reserve we need to build up. All the IPP's have 10-15 years irrevocable power purchase agreements. They are no going away soon. Demand is growing at 8%. Why produce all this power for who? Vision/ Mirage 2030 perhaps?

Power rationing are from the decrepit transmission lines and commercial theft. KPLC is fixing that by replacing some lines and build substations to distribute the consumer load across many substations so that one line shutting down doesn't shut everyone. At the moment Mombasa is producing excess power which can't be evacuated owing to an old transmission line from Mombasa to nairobi.

Power is expensive because of the sources and not because it is scarce. Geothermal is equally expensive in our basket of energy falling just below thermal. Hydro is the cheapest followed by wind and baggase. IPP's have 10,15,20 year PPA's so their input in the base load will always be there and together with geothermal will keep prices up. Download KPLC annual report and check the rates.

Egypt don't need our power, they have natural gas which they use and the rest they supply Israel, lebanon na hao wengine.

[quote=mkonomtupu]"Power producer (KenGen) is shopping for financial consultants to advise on the modalities of raising a massive Sh420 billion ($5 billion) in a fresh financing programme.

The new funding proposal comes barely three years after the utility firm raised Sh25 billion through a public infrastructure bond to fund the expansion of its electricity generating installations....
The consultants will be expected to advise on the best option of executing the proposed financing plan in line with the company’s corporate leverage ratio of 70 per cent debt and 30 per cent equity.

The tender, which has attracted seven consortia of both local and international bidders, will be awarded next month..."
http://www.standardmedia...fresh-capital-injection[/quote]

This will mean new equity of over KES 120 B. I see another IPO, rights issue and hybrid instrument aka pref shares to be taken up by GOK.

I think you have your economics upside-down: do you wait for economy to grow then boost power production or do you boost power production in order to spur economic growth?

If you ask investors to give you sh15b for 10 years for the purpose of buying food and medicine for the poor, do you think they will agree?

@much...& chur, I think you are the ones who have got your economics wrong. First We only have just under 1,300MW installed capacity..surely google Kenya Installed capacity and stop ready gabbage from the ministry of energy on www.energy.co.ke. It's mostly stomaeconomics. We are at peak demand of 1,280MW and demand has been growing at 8% since 1996 to 2011. There is nothing happening to suggest we will grow demand beyond 10% before 2015. Peak load should be 2000 MW at 2015. We rarely buy from Uganda, they don't even have any to sell, we sell them a bit but once Bujagali is done, they probably won't need any more because they are also producing oil shortly and Karima Hydro should be starting off shortly. Meanwhile we have excess power at Kipevu which can't be evacuated, so you can see it's not very difficult to end up with excess power. You also forget once we start producing oil, Turkana and Marsabit will be on Thermal througout. On KRC and RVR if we can't move cargo, we have no business talking electic trains yet.

There is no waxy oil, this is gabbage media likes to spew every once in a while. They said Uganda had waxy oil, which was gabbage and now I see they are talking about Kenya's oil being waxy. All I am saying is that Kengen is wittingly or unwittingly wrecking shareholder value through it's inefficiently organized financing. Now they want 120B equity for power projects this just means super dilution of existing shareholders to allow other big boys to come in meaning we are unlikely to ever get decent returns yet with a bit of financial engineering Kengen can deliver massive value for shareholders. My issue is that the need to maximize profitability of projects and not just create because there is mirage 2030, possibility of an electric rail etc. What if Mirage moves further and the electric train is out by 2 years, shareholders are toast. Already Kipevu III financed by Kengen Infrastructure bond is burning shareholders in a way.

Waa...lol!! Is this guy lying? http://wazua.co.ke/forum...sts&t=14926&p=16