Leaders’ Annual Conference Confidential Leaders’ Annual Conference 7th & 8th November 2018 Kenya School of Government Summary Budget Analysis Presentation by David Mwangi, Finance Manager

SUMMARY RECURRENT BUDGET ITEM AUDITED ACTUAL 2016/17 REVISED BUDGET 2017/18 AUDITED ACTUAL 2017/18 PROPOSED BUDGET 2019/2020 Total Revenue 36,609,991 38,397,022 34,781,000 47,818,481 Total Expenditure 25,076,067 26,378,984 23,035,533 36,371,683 Profit before Tax 11,533,924 12,018,038 11,745,467 11,446,798

2019/2020 RECURRENT BUDGET ITEM AUDITED ACTUAL 2016/17 BUDGET 2018/19 PROPOSED BUDGET 2019/2020 REVENUE KShs '000 Capacity Revenue 21,713,926 22,181,660 21,138,000 31,294,292 Energy Revenue 4,626,196 4,931,879 5,231,000 6,007,457 Well Heads Energy Revenue 2,666,500 3,397,355 2,915,000 3,072,105 Forex Adjustment 362,203 648,724 643,000 836,987 Steam revenue 5,189,072 5,365,628 6,222,057 4,735,865 Fuel pass through-Revenue 9,069,403 3,397,197 9,622,740 Fuel pass through-costs (8,812,613) (3,397,197) (9,246,855) Water Res. Mgt. pass through- Revenue 166,822 143,638 159,172 Water Res. Mgt. pass through- costs (166,822) (143,638) (159,172) Interest Income 1,242,157 659,736 1,529,000 EPP Administration 2,281 - Drilling & Consultancy 829,000 Other Income 550,866 383,040 274,771 TOTAL REVENUE 36,609,991 38,397,022 34,781,000 47,818,481

2019/2020 RECURRENT BUDGET ITEM AUDITED ACTUAL 2016/17 BUDGET 2018/19 PROPOSED BUDGET 2019/2020 RECURRENT EXPENSES KShs '000 Steam costs 2,795,798 2,760,667 3,549,428 2,440,916 Plant and operating maintenance 1,422,421 2,086,144 1,614 ,000 3,950,494 Staff costs 4,912,764 5,273,833 5,806,000 8,229,673 Welfare, Benefits and Training 769,248 784,208 647,000 1,827,703 Travel, Hotel, Fares & Allowances 309,645 289,942 361,000 896,171 Depreciation and Amortisation 9,244,422 9,615,276 10,159,000 12,458,766 Transport Expenses 165,993 199,985 133,000 538,718 Licensing expenses 25,789 80,407 53,000 149,069 General Expenses (Incl CSR) 271,568 448,135 357,000 552,262 Consultants Fees 49,873 160,300 26,000 546,130 Directors Expenses 75,709 82,000 52,000 83,400 Office Expenses 277,181 347,931 85,000 472,227 Legal & Statutory Expenses 122,974 128,500 117,000 427,000 Insurance expenses 684,293 800,000 767,000 1,025,000 Advertising 67,570 100,000 46,000 258,145 Finance Charges 3,417,442 3,114,656 3,031,000 2,409,010 Dam maintenance 107,000 Other (Gains)/Losses (72,233) - (164),000 Provision for write-offs 428,610 Total Expenditure 25,076,067 26,378,984 23,035,533 36,371,683 Profit before Tax 11,533,924 12,018,038 11,745,467 11,446,798

Historical Capex Budget Performance Vs 2019/20 Capex Budget 2016 Budget/ Actual 2017 2018 2019 2020 Proposed Budget Details KShs mil Capex Budget 41,206 45,312  50,421 46,731 **59,782 26,957  12,465  14,675 *6,908 N/A   *Expenditure as at 31st October 2018 **Capex after the budget discussions

2019 / 2020 BUDGET PROGRAMME (OG4) DATE ACTION RESPONSIBLE STATUS 24-09-2018 Release of budget guidelines to the Budget Holders. FP & Budgeting  Staff & Finance Manager Done 02/10/2018- 12 /10/2018 1. Data Entry by Budget Holders (in SAP). 2. ICT to open 2019/20 Financial year in the system and provide keying in authorizations to the Budget Holders. 1.Budget Holders guided by FP & Budgeting  Staff 2.ICT Staff   15/10/2018- 30/10/2018 Clarification/Discussions of the budget proposals with the Budget Holders and the related amendments in SAP. FP & Budgeting  Staff 31/10/2018- 02/11/2018 Compilation of the budget files. Discussion with Finance Manager and Finance & ICT Director. Outstanding 05/11/2018 Departmental Managers to Executive Committee (EXCO) FP & Budgeting  Staff, Finance Manager, F&IC T Director, Departmental Heads and  Divisional Heads 06/11/2018 Presentation by Divisional Directors 08/11/2018- 14/11/2018 Amendments to the budget as per recommendations by EXCO and preparation of Board Paper. FP & Budgeting  Staff, Finance Manager and  F&ICT Director

2019 / 2020 BUDGET PROGRAMME (OG4) DATE ACTION RESPONSIBLE STATUS 08/11/2018- 14/11/2018 Amendments to the budget as per recommendations by EXCO and preparation of Board Paper. FP & Budgeting  Staff, Finance Manager and  F&ICT Director Outstanding 21/11/2018- 21/11/2018 Presentation to the Strategy Committee for consideration (Full Board invited). Presentation to the Full Board. Managing Director supported by F& ICT Director, Finance Manager, FP & Budgeting  Staff and Divisional Heads 22/11/2018 -25/11/2018 Preparation of final GoK Schedules in approved format. FP & Budgeting  Staff, Finance Manager & F & ICT Director 26/11/2018 Forward the Budget to Ministry of Energy & Petroleum and Treasury for Approval. Finance Manager, F& ICT Director and Managing Director 01/02/2019- 31/03/2019 Follow up approval from Ministry of Energy and National Treasury. FP & Budgeting  Staff Finance Manager and F&ICT Director 01/04/2019- 15/05/2019 Preparation of Capital Structure in SAP and compilation of Budget Book FP & Budgeting  Staff Finance Manager  01/06/2019- 30/06/2019 Forward approved budget to the Budget Holders. FP & Budgeting Staff. Finance Manager 

Proposed Departmental Budget Presentations to ExCo …TBA… NOVEMBER 2018 (Day 1) TIME DIVISION ARRIVAL 7:30 AM ALL 7.45 A.M - 8.00A.M PRAYERS AND INTRODUCTION 8.00 A.M – 8.30A.M OPENING REMARKS BY MD & CEO (R. MIANO) 8.30 A.M - 9.00 A.M BUDGET OVERVIEW BY F & ICT DIRECTOR (J. MUDANY) 9.00 A.M – 9:30 A.M REVENUE - REGULATORY AFFAIRS DIRECTOR (S. NGURE)   9.30 A.M. – 10.45 A.M BUSINESS DEVELOPMENT Project Execution- R. Korir Capital Planning & PPP- E. Njenga New Business Development –N. Ng’eno BD Director – M. Wekesa 10.45 A.M- 11.05 A.M  COFFEE/TEA BREAK 11.00 A.M. – 12.45P.M. OPERATIONS DIVISION Eastern Region – J. Odumbe Upper Tana – E. Kibathi Western Region & Muhoroni GT – F. Konuche Thermal Region (Kipevu I, Kipevu III) – W. Kimote Ngong and Central Office Projects – J. Ngugi Technical Services – Omar Kuta Operations Director – S. Kariuki 12.45 P.M. – 1.45 P.M LUNCH

Proposed Departmental Budget Presentations to ExCo …TBA… NOVEMBER 2018 (Day 1 Continued…..) TIME DIVISION   1.30 P.M – 3.00 P.M. GEOTHERMAL DEVELOPMENT Geothermal Power Plant –F. Kawa Reservoir & Steam Field – P. Ouma Resources Development – P. Mangi Drilling & Logistics – E. Bett Geothermal Development Director – A. Rotich 3.00 P.M. – 4.00 P.M. STRATEGY & INNOVATION DIVISION Strategy Manager – K. Yaola Innovation Manager– P. Wambugu Strategy & Innovation Director – D. Muthike 4.00 P.M. – 4.45 P.M. SUPPLY CHAIN DIVISION Tenders & Contracts – Vincent Mamboleo Inventory Management & Logistics – Antony Kitungu Supply Chain Director – P. Yego

Proposed Departmental Budget Presentations to ExCo …TBA… NOVEMBER 2018 (Day 2) ARRIVAL 7.30 A.M ALL 8.00 A.M - 8.10 A.M PRAYERS 8.10 A.M – 8.20 A.M OPENING REMARKS BY MD & CEO Rebecca Miano   8.20 A.M. – 9.20 A.M COMPANY SECRETARY & LEGAL AFFAIRS DIVISION Property – J. Oduor Insurance –D. Nzioka Legal – B. Koskei Shares & Board Services – P. Mbwiri Company Secretary/Legal Affairs Director – P. Ndungi 9.00 A.M. – 10.00 A.M. HUMAN RESOURCES & ADMINISTRATION DIVISION Human Resources – J. Mbugua Performance and Change – B. Kandie Administration – Michael Gichuru HR & Admin Director – A. Serem 10.00 A.M. – 11.00 A.M. CORPORATE & REGULATORY SERVICES DIVISION Environment & CDM –J. Were Quality & Safety – H. Ithiami Regulatory – A. Oseko Communication – G. Chepkwony Corporate & Regulatory Services Director – S. Ngure 11.00 A.M – 11.20 A.M COFFEE/TEA BREAK

Proposed Departmental Budget Presentations to ExCo …TBA… NOVEMBER 2018 (Day 2 Continued……) 11.00 A.M – 11.20 A.M COFFEE/TEA BREAK   11.20A.M. – 12.00 P.M. MANAGING DIRECTOR & CEO Internal Audit & Risk – E. Audi Security& Integrity – T. Mbarak Events & Protocol – J. Muhoro MD& CEO – Francis Makabwa 12.00 P.M. – 12.45 P.M. KenGen Foundation Managing Trustee – 12.45 P.M. – 1.45 P.M.  LUNCH 1.45 P.M. – 3.00 P.M. FINANCE & ICT DIVISION ICT – J. Ombongi Corporate Finance – M. Maalu Finance – D. Mwangi Finance & ICT Director - J. Mudany 3.00 P.M. – 3.45 P.M. WAY FORWARD BY F & ICT DIRECTOR (J. MUDANY) 3.45 P.M. – 4.15 P.M.  CLOSING REMARKS BY MD & CEO (R. MIANO) 4.15 P.M TEA BREAK

Thank you