Hydrology Risks

• According to a study done by The World Bank and the University of Nairobi, one major risk faced by KenGen is the hydrology risk.
• The company faces hydrological conditions that affect its revenue because the conditions adversely affect the company's generating capacity.
• The major cause of this risk is the shortage of rains in areas of generation.
• The company is mitigating the risk by diversifying its hydro plants by investing in wind, geothermal, and coal.

Regulatory Risks

•  Regulatory risk is another major risk faced by KenGen. The Energy Regulatory Commission is the body in charge of laws and regulation of the energy sector.

• Any change in regulation and laws from ERC "can expose the company to liability and result in increased costs such as water levies, power project cost overruns, and other costs incurred in power project construction that may not be recoverable from power Purchase Agreements (PPAs)".