× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS

KenGen bond beats Sh15 billion target

By | October 1st 2009

By James Anyanzwa

The KenGen public infrastructure bond offering (Pibo) closed on Tuesday with preliminary figures indicating that the power utility firm issue surpassed its target by 33 per cent.

Provisional results from the transaction advisors showed the utility firm raked in Sh20 billion against a target of Sh15 billion.

However, KenGen may lock in the additional Sh5 billion against a target of Sh10 billion it expected to raise under the "green shoe" option.

Final tallying of the figures is expected to be completed tomorrow (Friday).

"We are currently compiling the data. Agents will require up to the end of the week to complete," said Mr Amish Gupta, one of the transaction advisors at the Standard Investment Bank, the sponsoring broker for the issue.

On target

"We are happy to be on target and we are satisfied with what we have achieved," he said yesterday.

Capital Markets Authority had given approval to the transaction advisors to take up an extra Sh10 billion from any oversubscriptions realised in the offer, which means KenGen could have banked a total of Sh25 billion from the bond offer.

Investors queue for the KenGen bond on Tuesday. They will earn tax-free interest returns at a fixed rate of 12.5 per cent per annum. [PHOTO: ANDREW KILONZI/STANDARD]

KenGen was seeking to raise Sh15 billion through the PIBO, the largest corporate bond offering in Kenya’s history to finance new energy generation projects.

This investment is part of the firm’s five-year growth strategy (2008-2012) aimed at increasing electricity capacity by 500MW to stabilise the country’s power situation.

Investors will earn tax-free interest returns at a fixed rate of 12.5 per cent per annum.The bond targeted both the retail and institutional investors.

The main projects that will benefit from the bond include Kipevu III thermal plant that will add 120MW to the national grid.

Annual growth

KenGen hopes to ensure the country has enough additional power generation capacity to cope with the projected eight per cent annual growth in power demand.

The current installed generating capacity is 1,296MW, with an effective capacity of 1,204MW against a system whose peak demand stands at 1,071 MW.

Investment in additional generation capacity will not only help the country cope with additional demand but also the power demand associated with the implementation of Vision 2030.

Share this story
PM insists US travel ban threat justified
Prime Minister Raila Odinga added a spin to the raging visa ban threat on Government officials when he supported the move.
Absa Bank net profit for 3 months up 24pc
The performance was mainly driven by growth in interest income, particularly in the small and medium enterprises.