KenGen cuts dividend by 16pc per share as profit stagnates

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Power producer Kenya Electricity Generating Company PLC (KenGen) has reduced dividends to shareholders by 16.67 per cent to 75 cents per share over the financial year to June 2026, from 90 cents the previous year, after reporting a marginal drop in earnings.

The company reported a 1.2 per cent drop in profit after tax to Sh10.35 billion during the year from Sh10.48 billion. The firm, however, said its revenues had increased following increased demand for electricity. KenGen’s revenues increased 6.4 per cent to Sh59.7 billion over the period to June 2026 from Sh56.1 billion the previous year.

It attributed the higher sales to increased electricity demand, which saw peak demand hit an all-time high of 2,549MW and, in turn, saw the company increase dispatch to the national electricity grid.

“Profit after tax remained broadly stable at Sh10.35 billion, compared with Sh10.48 billion in 2025, a marginal shift of 1.2 per cent. This was mainly attributable to a reduction in finance income, from Sh4.1 billion to Sh2.9 billion, following the strategic deployment of cash resources into capital investments intended to expand and strengthen Kenya’s electricity-generation infrastructure,” said Kengen when it published its financial results.

Shareholders are set to approve the board's recommendation for the 75 cent dividend during KenGen's annual general meeting on October 29 this year. The firm will pay the dividends around January 27 next year.

 KenGen chief executive Peter Njenga said the results reflected the company’s "ability to respond to Kenya’s growing electricity needs while investing for the future”.

“Every additional megawatt of dependable, renewable power strengthens the economy, supporting homes, hospitals, schools, industries and the enterprises creating opportunities for millions of Kenyans.”

The firm also said it had strengthened its balance sheet during the year through prudent capital and debt management, resulting in finance costs declining by 12.1 per cent to Sh2 billion “as continued repayments reduced outstanding loan balances”.

“Total borrowings fell by Sh12.2 billion to Sh97.1 billion, enhancing the Company’s financial flexibility and capacity to fund future growth,” Kengen said.

The firm’s higher revenues were on account of growing electricity consumption, which saw national peak electricity demand rise to 2,549 MW, recorded on July 15, 2026. “Record electricity demand is a powerful signal of a growing and increasingly connected economy,” said Eng Njenga.

“Our responsibility is to stay ahead of that growth by delivering reliable, sustainable and competitively generated electricity. By expanding renewable capacity and strengthening system resilience, we are helping protect consumers from the volatility associated with fossil-fuel generation while creating the energy foundation for Kenya’s industrial transformation.”

The firm remained the largest power producer in the country and accounted for 57.2 per cent of total electricity supplied to the grid during the year, more than 90 per cent of which was from renewable sources.

The company said it is accelerating development of new generation capacity that includes the redevelopment of the 63 MW Olkaria I Geothermal Power Plant, the 42.5 MW Seven Forks Solar Project, the 8.6 MW Gogo Hydropower Plant Upgrade and the 58.42 MW Wellhead Leasing Geothermal Project. KenGen is also developing battery-energy-storage solutions and the planned raising of the Masinga Dam spillway to increase water storage and power production capacity.

“These investments are designed around the needs of the Kenyan consumer,” Njenga added.

“They will increase available generation capacity, improve flexibility during periods of peak demand and reinforce the resilience of the national grid. Our ambition to add approximately 5,540MW of renewable energy by 2034 is ultimately about ensuring that electricity remains a dependable enabler of everyday life, enterprise and national prosperity.”

The firm has also been investing in diversifying its revenue streams to include the KenGen Green Energy Park and exporting its expertise in geothermal through offering consultancies in African and international markets, with engagements in Tanzania, Eswatini and Bhutan.