Centum targets geothermal stake with offshore arm

Mr Chris Kirubi, a director of Centum. The firm is looking at the energy sector as it seeks to diversify its business. FILE 

By VICTOR JUMA,

In Summary

• Centum has incorporated Mvuke Power Ltd, a subsidiary registered in Mauritius that will hold its investments in power generation and distribution.
• The company is expected to back the projects financially either through equity stakes or loans.

Centum has created an investment vehicle to spearhead its venture into the local and regional power sector as the firm diversifies its business.

The company has incorporated Mvuke Power Ltd, a subsidiary registered in Mauritius that will hold its investments in power generation and distribution.

Centum made the disclosure in a notice ahead of its 46th AGM on Wednesday where shareholders will consider the ratification of the new subsidiary among other newly created units.

The company’s main investments are in the beverage, automotive, food, and insurance sectors but it foresees huge growth opportunities in the capital intensive power industry.

“The power sector is profitable and important for us,” said Chris Kirubi, a director of Centum.

“We are eyeing the local geothermal projects in the short term but are also open to invest in other power ventures across the region.”

Mr Kirubi added that the size of investments in the power sector would depend on the specific projects to be undertaken.

Centum is expected to back the projects financially either through equity stakes or loans.

Private investments in power generation have been dominated by foreign firms with deep pockets to finance the capital-intensive ventures such as Rabai Power Ltd owned by UK sovereign fund CDC Group.

The government is also spending billions of shillings to generate more power and hook a larger portion of the population to the national grid, opening opportunities to financiers, engineers, and suppliers of power cables and equipment.

The power generation and distribution are carried out by State-owned firms Kenya Power, KenGen, Geothermal Development Company, and the Kenya Electricity Transmission Company (KETRACO) along with a number of Independent Power Producers.

Centum will join Transcentury, another investment firm, which has increased its stake in the power sector where it draws a large part of its earnings.

Transcentury serves the power sector mainly through its subsidiary East African Cables (EAC) that supplies electric cables and other equipment to regional utility firms, including Kenya Power.

Transcentury’s operating profit from its power division more than tripled to Sh521 million in the year ended December, accounting for 43 per cent of its pre-tax profits.

Expansion of electricity penetration is set to benefit firms like Centum by providing more opportunities for them to invest in power generation and distribution.