Treasury set to acquire Sh. 1.3 billion from KenGen’s Dividends

In a year the government is struggling to collect taxes due to Coronavirus effects, the National Treasury will pocket Sh. 1.3billion from the Kenya Electricity Generating Company. 70% of the stake at KenGen is owned by the Government while 30% by private shareholders.

During the firm’s annual general meeting, the shareholders voted to increase the dividend per share from 2019’s Sh. 0.2 to Sh. 0.3 for the year ending June 2020. The company’s net profits increased by 133% to Sh. 18.3 billion despite disruptions of the Coronavirus pandemic.

“Given the commendable performance in 2020 (considering the operating environment) the board of KenGen proposes a first and final dividend payment amount to Sh. 0.30 per ordinary share of Sh. 2.50. in total, once approved by the shareholders, the company will pay out She. 19.8 billion in dividends,” said Rebecca Miami, KenGen’s Chief Executive.

During a similar period in 2020, Sh. 995.38 billion of tax was collected. Due to the coronavirus pandemic effect on Kenya’s revenues, there was an Sh. 89.19 billion tax reduction in the 8 month period through February 2021. Companies such as KenGen and Safaricom paid treasury an Sh. 6.3 billion interims of dividend. These companies will play an important role in supplementing tax revenues.

KenGen’s diversification of revenue streams, cheaper electricity sales, and a large tax saving have brought forth great profits. This is following the completion of the Olkaria V geothermal plant. KenGen’s diversification strategy has led to the incorporation of consultancy services as well as new business lines in its revenue streams.

By Lilian Waeni