Listed electricity generating company KenGen will soon sign a contract to drill three explorative wells in Tanzania, as the neighbouring nation seeks to plug into geothermal energy

KenGen managing director and chief executive Peter Njenga, says within the next one month, the company should have kicked off operations in Tanzania, a move aimed at cementing its revenue diversification through venturing into markets outside Kenya.

KenGen started drilling its first well in Djibouti in November 2021 following the securing of a Sh709.0 million contract in February that year. In the same year, the Kenyan firm bagged contracts for the drilling of wells and consultancy in Ethiopia.

“One of the things we are doing is aggressive diversification in looking at outward markets. We are in Ethiopia; we are in Djibouti. Malawi has visited us and they are interested in us helping them explore their geothermal. We also have Tanzania, Zambia and Rwanda. Tanzania is now exploring its geothermal capacity and it is a small project which we intend to be done within three months,” Mr Njenga told the Business Daily.

Mr Njenga says the regional foray is expected to bolster the company’s performance with the target of closing the full year ending June 2024 at Sh8.0 billion in net earnings, a 59.5 percent increase from the Sh5.0 billion reported at the close of June 2023.

“What we are looking at is to make sure that we increase our profits. Looking at our asset base which is at around Sh500 billion, we expect actually to be making well above Sh10 billion as profit every year,” Mr Njenga said adding that the firm recorded a profit after tax of Sh5.2 billion in the full year to June 2023, a growth of 48 percent from Sh3.38 billion, and it is counting on diversification to boost its fortunes.

The company’s profit surge was driven by a 14 percent jump in its revenues, which grew to Sh53.96 billion up from Sh47.5 billion in 2022.

“We still have a long way to go and we are pushing very hard to improve efficiencies of generation because that is one area where we can do very well and ensure we have more revenue from our generators. We are targeting Sh10.0 billion within the next three years,” Mr Njenga says.