The water shortage has been felt in most countries in the region but has hit in Kenya particularly hard.

Three-quarters of the former British colony’s electricity is generated by water-driven turbines, forcing it to ration power for up to 12 hours a day, with only business districts, hospitals, security sites and industrial areas spared.

Hydroelectric dams are generating about half their installed capacity, while electricity generation has dropped by about 30% to 1000 megawatts and led to a 160-megawatt deficit at times of the day when power is in peak demand, said John Ombui, chief manager of distribution at state-run Kenya Power & Lighting.

Independent power producers with a total capacity of 266 megawatts will be put into operation by October, he said. Aggreko is one of the companies chosen by Kenya to help it deal with the electricity crisis.

Aggreko said it would supply an extra 140MW to the country in a contract worth $30m (about £18m). This is a perfect example of the global growth business in which the company operates. Many parts of the world are structurally short of power and the situation is getting worse, not better.

One of the major factors in winning the contract was that the company could install the power generators quickly. The fact that the company had supplied a similar temporary power plant to the Kenya power authority several years ago helped Aggreko win the present contract. The company has been running power plants in Africa for many years so Aggreko staff know how to apply equipment and know what they can and cannot do.

The energy crisis in the developing world is transforming Aggreko from an equipment rental business into something resembling an energy company.

As recently as 2006, Aggreko’s international power division accounted for only 29% of group profits; this year that figure is expected to be more than 50%.

The centre of this operation is a pair of sheds on the north bank of the Clyde in Dumbarton, just downstream from Glasgow.

Aggreko’s core products are diesel generators housed inside 20ft shipping containers. On its own, a single generator costs £120,000-£140,000 to build and can generate 1MW of power. Put dozens together, and you have a medium-sized power station that can be built as quickly as the containers can be shipped to the site.

The bulk of Aggreko’s fleet -- capable of generating 6000MW, equivalent to 9% of the UK’s generating capacity -- has been assembled from mostly off-the-shelf parts in Dumbarton, before being shipped to depots round the world.

The standardised nature of the product, and the global nature of the business, means that excess capacity can quickly be moved to where it is most needed.

Last year Aggreko supplied generators to the Beijing Olympics which powered camera and lighting equipment in a contract worth £22m.

The construction of the Olympic village in London will also use equipment supplied by Aggreko.

Aggreko employs 3500 people worldwide with more than 200 based at its Glasgow headquarters. The company was founded in 1962 in the Netherlands and demerged from Salvesen Group in 1997 to become a listed company on the London Stock Exchange.

Aggreko has made solid progress on reducing net debt, margins have increased and the group recently announced that it has lifted its dividend by 15%.The group also said that its outlook remained unchanged.

The company is usually cautious because, by the nature of the business, visibility is low. Most of its products are hired on spec and are not ordered with significant lead times. This means that visibility is difficult and it is hard to predict demand far in advance.The balance sheet is relatively robust, with net debt falling by £77m in first half of the year to £287m.

Reassuringly, the company recommended the interim dividend be increased by 15% to 4.37p a share, which will be paid on October 23.

The second half of the year is expected to be more subdued than the first half. The company is sticking with its December guidance of flat revenues for the full year on a constant currency basis. There is, however, likely to be a jump in reported revenues, which will be flattered by currency effects.

It’s a fair assumption that the US and Canadian market will remain depressed for a while, although Aggreko is correct to point out that a lot of short-term power has been booked in advance by its customers, for example for annual sports events. The company has won the contract to supply temporary generators for the Winter Olympics in the Canadian city of Vancouver next year.

Cash generation should also be boosted by the fact capital expenditure is likely to be lower than expected.

The shares are trading on a December 2009 earnings multiple of 12.2 times and yielding 1.7%. The shares have had a good run and are now more than 60% ahead of the initial recommendation.

The long-term markets in which the group operates are structurally sound, but with a slowdown expected in the second half, the shares could mark time from here.

They closed yesterday’s dealing 25p, or 3.6%. ahead at 725p.