Geothermal\ncemented its top spot among the energy mix generated by Kenya\u2019s largest power\nproducer KenGen, raking in Sh9.3 billion ($90.3 million) in the first half-year\nto December 2019.<\/p>\n\n\n\n
\u201cGeothermal\nenergy was the top company earner, bringing in Sh9.3 billion, up from Sh8.6\nbillion in the half-year period,\u201d Kenya Electricity\nGenerating Company (KenGen) said.<\/p>\n\n\n\n
Overall,\nthe State-owned firm booked a 98 percent net profit jump to Sh8.17 billion in\nthe half-year period, propelled by tax savings tied to geothermal\ndevelopment alongside steam exploration\ncontracts in Ethiopia. KenGen has identified geothermal, a clean renewable\nenergy cash cow, as its strategic growth driver, bringing in core revenues and\noffering income diversification pathways.<\/p>\n\n\n\n
\u201cThe (profit) growth is attributed to capital allowances\narising from the completion of 165MW Olkaria V geothermal project which\nresulted in a tax credit of Sh1.89 billion, compared to a tax expense of Sh1.9\nbillion in the previous period,\u201d KenGen managing director Rebecca Miano\nsaid.<\/p>\n\n\n\n
The Olkaria V facility is based in Kenya\u2019s Rift \u2013\nNaivasha\u2019s Olkaria steamfields.<\/p>\n\n\n\n
Kenya\u2019s tax regime allows for investment tax deduction of up to\n150 percent allowance on such capital expenditures as an incentive to spur large\ninvestments. It applies to projects valued in excess of $2million (Sh200\nmillion) with those located outside Kenya\u2019s three cities \u2013 Nairobi, Mombasa and\nKisumu \u2013 attracting a higher capital allowance of 150 percent and 100 percent\nfor city-based investments.<\/p>\n\n\n\n
Revenue earnings from hydropower, another energy source for\nKenGen, remained unchanged at Sh4.4 billion in the six-month trading window,\nfollowed distantly by wind and thermal sources.<\/p>\n\n\n\n
The power producer, 70 percent owned by the government of Kenya\nand listed on the Nairobi Securities Exchange said that its other income grew\n127 percent to Sh479 million, having clinched two geothermal drilling contracts\nin Ethiopia. <\/p>\n\n\n\n
The firm is still constructing 83MW Olkaria I\nunit 6 geothermal plant, set for completion next year, which will push its\ntotal geothermal capacity beyond the current 612MW.<\/p>\n\n\n\n
Officials recently announced that KenGen was eyeing geothermal infrastructure tenders in nine African countries which share the same geothermal belt along the Rift Valley geology.<\/p>\n\n\n\n
KenGen, which is handling two geothermal contracts in Ethiopia, is eyeing similar deals in Uganda, Tanzania, Djibouti, Rwanda, South Sudan, The Sudan, Zambia and Comoros to boost revenues.<\/p>\n\n\n\n