Listed electricity generating company KenGen will soon sign a contract to drill three explorative wells in Tanzania, as the neighbouring nation seeks to plug into geothermal energy.

KenGen Managing Director and Chief Executive Peter Njenga said the firm will start operation in Tanzania next month, a move aimed at cementing its revenue diversification by venturing into markets outside Kenya.

KenGen started drilling its first well in Djibouti in November 2021 following the securing of a Ksh709 million ($4.9 million) contract in February that year.

In the same year, the Kenyan firm bagged contracts for the drilling of wells and consultancy in Ethiopia.

“One of the things we are doing is aggressive diversification in looking at outward markets. We are in Ethiopia; we are in Djibouti. Malawi has visited us and they are interested in us helping them explore their geothermal.

We also have Tanzania, Zambia and Rwanda. Tanzania is now exploring its geothermal capacity and it is a small project which we intend to be done within three months,” Mr Njenga told the Business Daily.

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Mr Njenga says the regional foray is expected to bolster the company’s performance with the target of closing the full year ending June 2024 at Ksh8 billion ($55.2 million) in net earnings.

This is a 59.5 percent increase from the Ksh5 billion ($34.5 million) reported at the close of June 2023.

“What we are looking at is to make sure that we increase our profits. Looking at our asset base which is at around Ksh500 billion ($3.5 billion), we expect actually to be making well above Ksh10 billion ($69 million) as profit every year,” Mr Njenga said.

He added that the firm recorded a profit after tax of Ksh5.2 billion in the full year to June 2023, a growth of 48 percent from Ksh3.38 billion ($23.3 million), and it is counting on diversification to boost its fortunes.

The company’s profit surge was driven by a 14 percent jump in its revenues, which grew to Ksh53.96 billion ($372.1 million) up from Ksh47.5 billion ($327.6 million) in 2022.

“We still have a long way to go and we are pushing very hard to improve efficiencies of generation because that is one area where we can do very well and ensure we have more revenue from our generators. We are targeting Ksh10 billion within the next three years,” Mr Njenga says.

KenGen announced the payment of Ksh545.2 million ($3.76 million) worth of dividends on February 16 to 190,784 shareholders following approval in the annual general meeting held last year.