One of the Kenya Electricity Generating Company (KenGen) stations.
Kenyans will enjoy cheaper electricity from next month, the Energy
Regulatory Commission (ERC) has confirmed. PHOTO | FILE |
XINHUA
The Kenya Electricity Generating Company (KenGen) has begun the
search for a consultant to supply and implement an audit management
system as the company scales up measures to curb fraud.
The
information technology (IT)-based system is expected to increase the
scope of KenGen’s internal audit department which, according to an
insider, is currently “more oriented towards financial audit”.
The
new system is, therefore, expected to include IT audit, capital
projects audit, operations audit and fraud investigations in the
company’s audit and risk management department.
“The
department envisages a continuously evolving audit scope as the company
grows and extends its boundaries. It is imperative that the audit and
risk team responds by extending the coverage and the depth of audits
while shortening the audit cycles. The company requires an optimised
audit process, hence the need for an audit management system,” read a
tender notice.
Sources within the company privy to the
undertaking, who cannot be quoted as they are not authorised to speak on
behalf of the firm, told Sunday Nation that the move has been
taken to “mitigate possible fraud” as KenGen undertakes capital
intensive projects to meet the government’s target for power generation.
GRAND PROJECT
KenGen,
70 per cent owned by the government, is expected to play a key role in
accelerating electricity generation under the grand project launched
last September that is expected to increase generation capacity by 5,000
megawatts in 40 months.
Much of this power is expected to come from renewable sources such as wind and geothermal, in addition to coal and natural gas.
The
audit management system is also expected to assist KenGen to reduce
spending on audits as it is envisaged that the system would be
interconnected thereby reducing the need for travel by auditors and
associated expenses such as per diems.
KenGen will be
seeking to raise Sh30 billion from its maiden rights issue that has been
delayed for two months pending a government decision on its
contribution to the exercise.
The government is the
majority shareholder, and its contribution to the rights issue is
expected to be to a tune of Sh15 billion.
The rights
issue was scheduled for June, but discussions between the ministries of
energy and petroleum and the National Treasury over whether the
government would take up its rights have taken longer than anticipated.
With the cash, the firm intends to restructure its balance sheet to maintain its favourable debt versus equity position.
Together
with an anticipated debt of Sh70 billion from external lenders, the
electricity generator hopes to raise Sh100 billion to finance a number
of projects it has lined up for completion in 2016.
OWE GOVERNMENT
At
an investor meeting in March, KenGen said it owed the government Sh22
billion as at that time. Swapping the debt for government rights is
among the options being explored before the company can go ahead with
the issue.
KenGen’s full-year profit after tax went up by 86 per cent from Sh2.8 billion in June 2012 to Sh5.25 billion in June 2013.
The
increase in net earnings was attributed to an investment allowance the
company got during the period for its capital expenditure to put up the
Sangoro and Kindaruma hydro stations and purchase of geothermal drilling
rigs.
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