TransCentury unveils spending plan for Sh4b bounty
A geothermal power plant being developed by TransCentury at Menengai is expected to start feeding the national electricity grid by end of next year. The firm said the 35-megawatt (MW) power plant is part of its planned investments in high value infrastructure projects over the next three years.
Chief Executive Officer Gachao Kiuna said the firm would finance the new investments through the company’s internally generated funds, including proceeds from the sale of its stake in Rift Valley Railways (RVR).
The firm in March sold its 34 per cent shareholding in RVR to Citadel at a cost of Sh3.7 billion ($43.7 million). He also said the money would be used to reduce the company’s borrowing from commercial banks.
“The proceeds from the RVR sale are being re-deployed towards investment into a new 35MW power plant in Menengai with a power purchase agreement (PPA) already initiated,” he said at a media briefing yesterday.
He saidthe money would also be used to support operations across the region, in particular acquisition and upgrade of plant and machinery.
The proceeds from the sale of RVR did not give the company the return it had hoped for and there are fears that this could affect its financial performance this financial year.
After the sale was concluded, the firm issued a warning to its shareholders that its profits for this year (2014) ending December 31 would be 25 per cent lower than that of 2013.
The firm last year reported a 30 per cent decline in profitability, with profit before tax of Sh858 million down from Sh1.2 billion in 2012.
TransCentury is going into power production with expectations that it will proof to be a significant revenue stream once it starts getting a return.
It is also at a time when there is a growing push from Government to grow the electricity generation capacity, with the planned 5 000MW over the next three years.
TransCentury geothermal power plant electricity