REVENUE BUDGET PRESENTATION 2019/2020 JOH-KGN001-20071212-JvW-X1 REVENUE BUDGET PRESENTATION 2019/2020

COMPONENTS OF REVENUE BUDGET Revenue Budget = Capacity + Energy +Steam + Other Revenues: Capacity Revenues Predetermined in the PPAs Escalations for inflation Maintenance Periods Energy Revenues Load factors Maintenance periods Steam Revenues Load factor for the respective plants Year of operation as per the GDC contract. Other Revenues - Finance to provide Steam Sales Other consultancy services Geothermal spa Forex Adjustments Interest

ASSUMPTIONS AND ISSUES Near normal Hydrology assumed Large Hydros Load factor assumed - 40% Well Head load factor assumed to be 70% Olkaria I & II Geothermal plants load factor assumed to be 70% Olkaria IAU & IV Geothermal plants load factor assumed to be 70% Muhoroni GT: GT1 active Load Factor of 20% at Muhoroni GT2 active Load Factor of 20% at Muhoroni GT1 reactive Load Factor of 10% at Muhoroni GT2 reactive Load Factor of 10% at Muhoroni KDP I and KDP III Load Factor of 10%. Escalation at 1.25% for FOMCR and VOMCR.

ASSUMPTIONS AND ISSUES Load factor of 30% for Ngong I Phase I and 35% for Ngong I Phase II and Ngong Phase II - micro siting affected the load factors. Normal maintenance to be undertaken in accordance with the schedule. Lake Turkana wind load factor of 60% and 300MW assumed. Garissa Solar power Load Factor of 30%, 8 hour per day of sunlight, capacity of 40MW Importation from Ethiopia-400MW not factored in. More information on the status of the 400 KVDC line awaited. Future of Olkaria I not clear at the time of budgeting-whether refurbishment will happen or not. Actual prevailing capacity of the wellheads is not clear: some issues need to be addressed. CoD, capacity, well connection and GDC Contract.

CAPACITY REVENUES 2018/2019

CAPACITY REVENUES 2017/2018- ACTUAL VS BUDGET PERFORMANCE Generation Mode Budget 2017/2018 (Mil) PPA Revenues (Mil) Actual Revenues (Mil) %Var Budget vs Actual) (Mil) %Var PPA vs Actual) (Mil) Main Hydro 7,907.97 7,948.92 7,127.24 -9.87% -10.34% Geothermal 11,155.49 11,198.17 11,176.93 0.19% -0.19% Thermal 3,648.26 3,720.79 2,855.92 -21.72% -23.24% TOTAL 22,711.71 22,867.87 21,160.09 -6.83% -7.47%

PROJECTED CAPACITY REVENUES 2019/2020 & HISTORICAL Financial Year FY 2019/2020 FY 2018/19 FY 2017/18 FY 2016/17 Hydros 8,372,811,105 7,791,365,044 7,576,625,151 7,690,304,324 Geothermal 18,752,734,619 11,004,824,931 10,962,871,320 10,909,995,677 Thermals 4,168,746,365.03 3,646,107,170.76 3,574,237,003.93 3,533,015,994 Total Capacity Revenues 31,294,292,090 22,442,297,147 22,113,733,476 22,133,315,997

GRAPHICAL PRESENTATION OF PROJECTED CAPACITY REVENUES

PREVIOUS REVENUE BUDGET PERFORMANCE AGAINST ACTUALS Capacity Revenue Kshs M Year  Actual Budget Variance % Comments on the variance 2013-2014 13,288 14,903 -11% GTs and Olkaria II breakdown 2014-2015 19,102 20,564 -7% 280 MW inspection, GT breakdowns 2015-2016 21,253 22,580 -6% Breakdowns on Olkaria I AU 4&5 and Olkaria IV, Kipevu I DG3 and Masinga. Generally within tolarable limits 2016-2017 21,909 22,133 -1.23% Within Budget 2017-2018 21,160 22,711 -6.83% Delayed GT2 Relocation, Lack of reactive revenues, Kipevu I DG3, Poor Hydrology.

ENERGY REVENUES 2018/2019

YEAR HYDRO (GWh) GEO (GWh) THERMAL (GWh) WIND (GWh) TOTAL (GWh) GROWTH IN BUDGETED NEO YEAR HYDRO (GWh) GEO (GWh) THERMAL (GWh) WIND (GWh) TOTAL (GWh) 2013-2014 3,578.77 1,591.10 1,206.20 14.48 6,390.55 2014-2015 3,365.21 3,042.60 707.81 58.01 7,173.63 2015-2016 3,359.55 3,635.83 362.52 66.62 7,424.52 2016-2017 3,233.63 3,901.54 339.5 66.43 7,541.10 2017-2018 3,188.19 3,645.63 413.472 75.9492 7,323.24 2018-2019 3,259.93 3,798.48 511.58 75.95 7,645.95 2019-2020 2,846.08 3,978.74 241.62 76.16 7,142.59

ENERGY REVENUES 2017/2018- ACTUAL VS BUDGET PERFORMANCE PPA Budget (Mil) PPA Revenues (Mil) Actual Revenues (Mil) %Var Budget vs Actual) %Var PPA vs Actual) Main Hydro 95.86 115.27 96.09 0.24% -16.64% Sangoro 768.01 827.80 856.68 11.55% 3.49% Olkaria I 719.75 728.94 582.87 -19.02% -20.04% Olkaria I AU 1,048.87 1,067.29 1,070.51 2.06% 0.30% Olkaria II 79.44 81.73 86.61 9.03% 5.97% Olkaria IV 1,153.78 10.00% 8.10% Kipevu I 32.54 53.07 74.42 128.66% 40.21% Kipevu III 176.06 256.38 493.04 180.04% 92.31% Muhoroni GT 2 (Active) 52.15 26.41 35.09 -32.70% 32.87% Muhoroni GT 2 (Re-active) 12.73 11.51 - -100.00% Well Heads 3,156.41 3,034.63 3,033.38 -3.90% -0.04% Eburru 127.82 115.36 53.93 -57.81% -53.25% Ngong I(Ph. 2) + Ngong II 548.19 558.15 343.38 -37.36% -38.48% Isolated, Small Hydros & Ngong I Ph I 287.39 670.27 311.51 8.40% -53.52% TOTAL 8,154 8,614 8,191 0.46% -4.91%

PROJECTED ENERGY REVENUES 2019/2020 & HISTORICAL GENERATION MODE FY 2019/2020 FY 2018/19 FY 2017/18 FY 2016/17 Main Hydros 111,238,713 95,997,012 95,859,377 93,972,022 Sangoro 869,163,624 775,069,382 768,008,693 764,429,609 Thermals 204,366,318 310,998,555 260,755,408 438,828,830 Geothermals 3,446,689,313 2,297,808,623 2,177,168,090 2,239,554,834 Energy PPA 709,353,756 657,661,138 287,385,935 545,545,414 Olk I 728,689,349 700,910,851 719,751,910 553,895,125 Wellheads 3,072,104,719 3,235,576,080 3,156,413,370 3,204,162,720 Eburru 118,660,117 127,823,000 126,582,000 Ngong I PhII & Ngong II 659,405,978 547,646,487 548,192,613 462,301,389 GT Reactive 29,053,009 22,578,326 12,727,514 66,737,634 Total Energy Revenues 9,948,724,896 8,772,069,454 8,154,085,910 8,496,009,577

Previous Budget performance against Actuals Energy Revenues Kshs M Year Actual Budget Variance % Remarks 2012-2013 2,982 3,267 -8.72% KDP III- dispatch lower than budget. Well Heads- project delay Sangoro- Project delay. 2013-2014 3,728 5,311 -29.81% Low GT availability and Olkaria II. Also delay in well head commissioning 2014-2015 6,206 7,059 -12.08% Low dispatch from thermal & wind plants. 2015-2016 8,468 8,767 -3.41%   2016-2017 7,293 8,337 -12.53% Poor Hydrology majorly contributed to the variance 2017-2018 8,191 8,154 0.46% Performance within budget

STEAM REVENUES 2018/2019

STEAM REVENUES 2019/2020 Source FY 209/2020 FY 2018/19 FY 2017/18 Steam Revenue USD 22,677,364 26,864,653 25,900,097 Steam Revenue Kshs @101 2,689,837,344 2,767,059,302 2,667,710,020

SUMMARY OF ALL REVENUES GENERATION MODE FY 2019/2020 FY 2018/19 FY 2017/18 FY 2016/17 Total Capacity Revenues 31,294,292,090 22,442,297,147 22,113,733,476 22,133,315,997 Total Energy Revenues 9,948,724,896 8,772,069,454 8,154,085,910 8,496,009,577 Steam Revenue Kshs @101 2,689,837,344 2,767,059,302 2,667,710,020 2,744,040,376 TOTAL 43,932,854,330 33,981,425,903 32,935,529,406 33,373,365,950

REVENUE BUDGET LIMITS FOR EACH PROFIT CENTRE 2018/2019

TARIFF COMPONENTS Energy Charge Budget Maximum Capacity Charge JOH-KGN001-20071212-JvW-X1 TARIFF COMPONENTS Fixed O&M Revenue (FOMCR) Variable O&M Revenue (VOMCR) Capacity Charge Energy Charge Staff Costs Insurance Costs Land Rents Maintenance Costs Chemicals Lubricants Costs Casuals Budget Maximum TARIFF Capacity charge rate (CCR) Power Plant Civil Works Consultancy Cost Land Costs Working Capital Transmission Lines Interest During Construction Cost of Equity During Construction Variable Operating Expenses EXPENSES Savings Fixed Operating Expenses

REVENUE BUDGET LIMITS CAPACITY PLANTS RESERVED for debt, interest payments + profit FCC FOMC VOMC Available for O&M Expenditure Masinga 293,560,000 112,022,271 5,270,630 117,292,902 Kamburu 660,510,000 175,126,647 11,629,152 186,755,799 Gitaru 1,585,224,000 838,917,231 31,657,547 870,574,779 Kindaruma 517,399,500 273,813,263 10,624,850 284,438,113 Kiambere 120,359,6000 636,955,675 241,757,22 661,131,399 Tana 146,780,000 77,131,965 3,014,142 80,146,107 Sondu 440,340,000 233,032,564 9,042,425 242,074,990 Turkwel 770,595,000 407,806,987 15,824,244 423,631,232 TOTAL 5,618,004,500 2,754,806,606 111,238,713 2,866,045,319

REVENUE BUDGET LIMITS CAPACITY PLANTS RESERVED for debt, interest payments + profit FCC FOMC VOMC Available for O&M Expenditure Olkaria II 2,872,339,000 842,204,425.85 78,480,088.60 920,684,514.45 Olkaria I AU 2,724,853,600 950,533,578.68 1,071,245,730.24 2,021,779,308.92 Olkaria IV 3,101,901,600 933,428,055.28 1,075,856,544.00 2,009,284,599.28 Olkaria V 6,142,234,200 1,185,240,160.00 1,221,106,950.00 2,406,347,110.00 TOTAL 14,841,328,400 3,911,406,220 3,446,689,313 7,358,095,532.64

REVENUE BUDGET LIMITS CAPACITY PLANTS RESERVED for debt, interest payments + profit FCC FOMC VOMC Available for O&M Expenditure Kipevu I 369,831,600.00 489,736,021.59 21,184,335.91 510,920,357 Kipevu III 1,650,885,950.00 727,835,000.00 109,614,987.00 837,449,987 GT 1 , Muhoroni ( active & reactive) 320,905,200.00 364,695,279.38 38,358,326.16 403,053,606 GT 2, Muhoroni (active & reactive) 114,609,000.00 130,248,314.06 35,208,668.88 165,456,983 TOTALS 2,456,231,750 1,712,514,615 204,366,318 1,916,880,933

REVENUE BUDGET LIMITS ENERGY PLANTS FCC O&M = FOMC+VOMC TOTAL Sangoro 631,973,664 237,189,960 869,163,624 Sagana 16,945,260 74,306,212 91,251,472 Mesco 4,522,601 19,831,938 24,354,539 Wanjii 85,231,874 373,748,038 458,979,912 Sosiani 2,119,100 9,292,411 11,411,512 Gogo 22,907,082 100,449,240 123,356,322 Olkaria I 99,142,445 629,546,904 728,689,349 Well Heads 3,072,104,719 Eburru 118,660,117 Ngong I(phase I) 64,375,301 24,901,935 89,277,236 Ngong I(phase 2) 153,240,394 36,802,520 190,042,914 Ngong Ii 306,480,787 73,605,040 380,085,828 Garissa Lamu Ndula 4,577,703,344 1,579,674,198 6,157,377,542

JOH-KGN001-20071212-JvW-X1 Thank You