NAIROBI, Kenya – Kenya Electricity Generating Company (KenGen) is directing more resources towards power infrastructure as electricity demand rises, even as shareholders prepare for a lower dividend following a slight decline in annual profit.
The state-controlled power producer invested Sh15.5 billion in infrastructure during the financial year ended June 30, 2026, a 14.3pc increase in capital spending, while its first and final dividend dropped to Sh0.75 per share from Sh0.90 in the previous financial year.
The competing priorities were highlighted at the company’s annual general meeting on Thursday, October 29, where shareholders approved the dividend for the 2025/2026 financial year.
The payout is expected on or around January 21, 2027, for shareholders whose names were on the register at the close of business on October 29.
KenGen’s strategy comes as Kenya’s peak electricity demand reached 2,549 megawatts, increasing pressure on power producers to maintain reliable generation while developing additional capacity.
Revenue Grows as Net Profit Slips
KenGen’s revenue increased by 6.4pc to Sh59.7 billion, up from Sh56.1 billion in the previous financial year, supported by higher electricity sales and increased dispatch to the national grid.
Operating profit rose by 4.1pc to Sh14.2 billion, but profit after tax declined by 1.2pc to Sh10.35 billion from Sh10.48 billion.
The company attributed the marginal decline in net earnings primarily to lower finance income as cash resources were deployed into capital investments.
Its finance income fell to approximately Sh2.86 billion from Sh4.11 billion in the previous year, according to its published financial results.
KenGen supplied 8,975 gigawatt-hours of electricity to the national grid during the year, meeting 57.2pc of national electricity demand. More than 90pc of the electricity it dispatched came from renewable sources, according to the company.
Managing Director and Chief Executive Officer Peter Njenga said the investments were intended to keep existing plants reliable while developing capacity to support households, businesses and future economic growth.
Debt Reduction Accompanies Infrastructure Spending
Alongside the investment programme, KenGen reduced its borrowings by Sh12.2 billion to Sh97.1 billion, according to figures released by the company.
Board Chairman Frank Konuche said the business needed to balance shareholder returns with investment in assets that would generate future earnings.
He said the company recognised the importance of dividends but also needed to strengthen its long-term financial position.
The reduction in the dividend represents a 16.7pc cut from the Sh0.90 per share paid for the previous financial year.
The financial results therefore present a balancing act for KenGen: increasing expenditure on electricity infrastructure while managing debt and maintaining returns to investors.
Olkaria, Solar and Hydropower Projects in Focus
KenGen’s development pipeline includes the rehabilitation of Olkaria I geothermal power station, the proposed 42.5-megawatt Seven Forks solar plant and the redevelopment of Gogo hydropower station.
Battery storage and a proposed raising of Masinga Dam are also part of its plans to strengthen electricity system resilience and support hydropower generation.
The projects are intended to diversify and reinforce the company’s generation portfolio as electricity consumption grows.
Beyond electricity sales, KenGen is seeking to expand the commercial use of geothermal resources through its proposed Green Energy Park at Olkaria in Naivasha.
The park is designed to attract manufacturers and other businesses that can use geothermal electricity, steam and industrial land. Target sectors include food processing, manufacturing and data centres.
The company says the development has secured special economic zone status and designation as a customs-controlled area, providing a framework for attracting investors.
Njenga said geothermal resources could support industrial activity beyond supplying electricity to the national grid, potentially creating jobs and strengthening local manufacturing.
KenGen is also pursuing technical services through its G2G 2034 Strategy, including geothermal drilling, resource assessment, engineering and power plant operation and maintenance. The services are intended to diversify revenue beyond electricity generation.
Leadership Transition Ahead
The infrastructure and commercial expansion programme will continue under incoming chief executive Ronoh Kibet Charles, who currently serves as General Manager for Commercial Services.
Charles is scheduled to take over from Njenga on February 1, 2027, allowing for a transition as the company advances its generation projects and industrial development plans.
KenGen’s next phase will test its ability to convert rising electricity demand and geothermal resources into sustainable earnings while maintaining reliable power supply and managing shareholder expectations.
For investors, the lower dividend signals that returns must be considered alongside the company’s investment requirements and financial position.
For electricity consumers and businesses, the central question is whether the spending will translate into sufficient, dependable generation to meet Kenya’s expanding energy needs.
