Media Statement by acting KenGen MD Abraham Serem

KenGen appointed Abraham Serem as its Acting Managing Director and Chief Executive Officer (CEO), replacing Rebecca Miano.

Miano took up the East African Community Cabinet Secretary (CS) role after her swearing-in on Thursday, October 27.

Her replacement at KenGen, Serem, is the company’s General Manager in charge of Human Resources and Administration, a position he assumed on March 1, 2016 when he joined the firm.

Here is the media statement from the acting MD and CEO Abraham Serem

Good morning and Happy New Year

8. My name is Abraham Serem, I am the Acting Managing Director and CEO KenGen.
9. As we start the year, we are cognizant of the contribution that KenGen makes in the country to catalyze Kenya’s socio-economic development. Our core mandate is electricity generation and today, we wish to reiterate this message and assure Kenyans and all our key stakeholders that we intend to stay on the path of maintaining competitive electricity tariffs, scale up green energy deployment, and continue focusing on sustainability as part of the global climate action agenda.
10. I am therefore delighted to join you today as the year begins – when it is customary to reflect, express gratitude, make resolutions and plan ahead. Indeed, there is no better time than now to discuss our plans with you and give details on KenGen’s 2023 outlook.
11. Let me start by thanking you for covering KenGen over the years. We do not take this for granted. Together, we have been able to tell Kenya’s energy story. Today, much is known about us because of you the members of the fourth estate telling KenGen stories.
12. As an organization, we are cognizant of the fact that communication, and in particular quality reporting, is among the key pillars of transformation in any organization and the country at large.
13. So far, the year has picked up very well, which goes to show what the future holds especially for us in the energy sector.
14. It is our desire to engage more with you so that we are able to inform the public about what is happening in the energy sector and KenGen in particular.
15. We can all agree that clean energy is a vital economic enabler for critical services and essential for a better quality of our citizens’ lives. As such, the planning of its generation from our vast renewables comes in handy as outlined in Vision 2030 blueprint and the Kenya Kwanza Government manifesto. It is against this backdrop that we identified the need to begin engaging our stakeholders early in the year and set the right pace for the year.
16. We are aware that affordable and competitively priced electricity attracts energy-intensive industries for both the domestic and global markets and helps to spur demand and consumption of power by wananchi. It is a vision we share with our national leaders and development partners alike.
17. Allow me now to look at some of these things in more detail.
18. As we start the year 2023, we will be seeking to build on the previous year’s successes and which we believe will lead us to continue delivering good performance. This was demonstrated in the year under review. In the said year we posted a 4.7 billion profit after tax, representing a 157% year-on-year rise more than double posted by the company over the same period in the 2021 financial year.
19. Our business fundamentals are strong, and we see ourselves growing our revenues in the future as we endeavour to increase efficiency across the business. At the same time, our revenue grew by 7.5% from Ksh.45.7 billion in 2021 to Ksh.49.2 billion, as the company continued to benefit from investments in geothermal, which guarantees stable supply and guards us against vagaries of weather associated with hydropower generation. Most notably, in the year under review, we commissioned the 86MW Olkaria I Unit 6 further increasing our baseload capacity.
20. Due to the increase in intermittent power in the country, KenGen has the single responsibility to increase baseload capacity to stay ahead of the demand while maintaining a rich energy mix which is key in providing system stability.
21. As you may be aware the country has experienced a three-year drought which continues to severely affect hydropower generation. The adverse impact of drought has not been felt, however, thanks to geothermal energy. For those of you who remember the last time we had a similar situation in the early 2000s, we had a series of power rationing schedules which we have now been shielded from because of the investments in geothermal.
22. As you all know, success has its own demands, one of them is going the extra mile and improving or maintaining what you have already achieved.
23. Keeping this in mind, as an organization, increasing value to our shareholders and all other stakeholders in 2023 remains our top agenda.

Our focus will be around THREE MAIN AREAS which I will now highlight.

First is RENEWABLE ENERGY DEVELOPMENT

17. Kenya has already established leadership in green energy and climate action agenda. As a matter of fact, very few countries worldwide can boast of having more than 92% share of grid-scale renewable energy.
18. To keep us focused on the renewable development program, we have a ten-year Corporate Strategy recently approved by the Board. This year, we are now ready to roll it out having developed a robust implementation plan to lead us to the next frontier of our business growth.
19. Over the next 10 years, we envisage putting up 3,000MW of renewable energy in the country. This new plan will be driven largely by deploying up to 2,000MW drawn from geothermal sources as baseload power to stabilize the country’s energy mix thereby diversifying away from expensive thermal sources and shifting focus to more reliable and clean geothermal energy.

This is exactly what government envisions, and we are committed to supporting this as an implementing agency.

20. Although geothermal remains our biggest focus, hydro is still our bedrock at about 826MW which continues to complement our mainstay, which is geothermal. We, therefore, plan to optimize the existing hydro source which entails rehabilitating our existing power plants to make them more efficient for sustainable power generation.
21. We also plan to rehabilitate our Gogo hydropower plant to increase its capacity by about 8.6MW from the current 2MW. This is expected to contribute to the stability of the power supply in the Western Region.

Ladies and gentlemen

22. One of our largest God-given resources is geothermal and all our future investment efforts going forward should be directed to the untapped 9,000MW geothermal potential in the Rift valley.
23. In our projects pipeline, we look forward to working on our 305MW geothermal power projects consisting of 280MW from geothermal sources in Olkaria and 25MW from the Eburru geothermal field in the coming years. The construction of these projects will commence after getting the requisite approvals.
24. One of our top priorities will be to assess our existing power plants and seek to improve them to produce more from the same machines. On the same note, this year, we plan to leverage on new technologies to rehabilitate our oldest geothermal power plant whose first unit was commissioned in 1981, the 45MW Olkaria I. This project seeks to give it a new lease of life and increase its generation capacity to about 63MW.

We will also be rolling out plans to up-rate the turbines for the Olkaria I Additional Units 4 and 5 and Olkaria IV power plants to increase their output by an additional 40MW in a wider plan to further increase Kenya’s energy supply and catalyze the country’s economic growth.

25. Our ambition going forward, is to access more drilling fields for geothermal after successful drilling expeditions in the existing fields.

The acquisition of new fields will be one of the major initiatives for us in the new year as we seek to take advantage of the 10GW geothermal potential in the country.

B:  My second point is on DIVERSIFICATION

26. On diversification, we will continue with ongoing drilling in the horn of Africa as we continue exploring other opportunities in the region. Some of these opportunities will include the ongoing capacity building that we do in the region mostly on renewable energy, and commercial geoscientific studies, among others. We will leverage our experience to grow our business in the region.
27. As a forward-looking company, we are always focusing on continual improvement to increase efficiencies in power plant Operations and Maintenance by training our staff to up-skill and re-tool them to competently manage existing power plants and seek to give support to other organizations and countries in the region, should the need arise.

C: The third point is on E-MOBILITY

28. Looking into the future, an area we shall seek to develop further is e-mobility. We look forward to rolling out an E-mobility campaign aimed at leading Kenya’s transition from gasoline-powered vehicles to Electric Vehicles (EV) as another way of combating climate change and drive-up demand for electricity from renewable sources.

Ladies and Gentlemen

29. As I conclude and before we open the floor for Q & A, I would like to note that there is a lot ahead of us this year. This month, for a start, we shall be having our 70th AGM to be held on 26^th January 2023.

I take this opportunity to invite all our shareholders to attend the AGM which will be held virtually. I also extend an invitation to our partners from the media to attend and provide coverage.

30. As an organization, we shall put our best foot forward, strive to accomplish what we have set out to do, and work together with our stakeholders in generating clean, reliable, safe, quality, and competitively priced electricity for the nation in 2023.
31. Finally, ladies and gentlemen, it is my hope that what we have shared today gives you a deeper insight into the state of KenGen as the country’s leading energy producer.

Thank you all… Asanteni sana!