KenGen, Kenya Electricity Generating Company earnings from the new Ethiopian operations have quadrupled from Sh440 million last year to Sh1.7 billion in the year ending June 2021.
The increased earnings are attributable to the firm’s diversification venture.
This further includes drilling in Tulu Moye in Ethiopia.
The increased profits have contributed revenues that surpassed the expenses of setting up.
KenGen Initial Investment
KenGen said in its annual report the costs associated with the drilling of wells in Tulu Moye were Sh1.3 billion.
Ethiopia operations increased the costs of staff, plant operations, and maintenance as well as drilling.
It has been setting sights on new markets for its geothermal business and looking to turn byproducts into money-making enterprises.
“Employee expenses increased by 8.5 percent to Sh7.6 billion due cost for staff engaged in the drilling operations in Ethiopia.
They also include the implementation of Collective Bargaining Agreement (CBA), and gratuity for personnel on contract terms,” KenGen said.
“The plant operation and maintenance expenses increased from Sh1.5 billion to Sh1.8 billion.
This is because of expenses related to drilling in Ethiopia,” the firm said.
The company has been diversifying revenue streams away from producing electricity and selling to Kenya Power.
This is by supplying drilling services to Ethiopia and Djibouti.
The firm also plans to start drilling services for the Aluto-Langano project — also in Ethiopia.
It has moreover signed a Sh709 million contract to drill three geothermal wells in Djibouti.
It said it is eyeing similar deals in Uganda, Tanzania, Djibouti, Rwanda, South Sudan, The Sudan, Zambia, and Comoros to boost revenues.