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Update: Despite initial challenges Akiira Geothermal to continue exploration in Kenya

Drilling rig at Akiira (Courtesy of MunichRE)
Alexander Richter Alexander Richter 8 Sep 2018

Development company Akiira Geothermal plans additional exploration for its first phase 70 MW development, despite two unproductive wells drilled so far.

Reported this week from Kenya, one of the private geothermal projects in Kenya, the Akiira geothermal project has announced that it will resume exploration drilling near Olkaria, despite a failure on meeting expectations with the initial two wells drilled.

The developer Akiira Geothermal is joint venture by Centum, Mvuke Power Ltd (owned by Centum Investment Company), Marine Power Generation Ltd, DI Frontier Energy Carbon Fund (a Danish Power Fund) and Ram Energy Inc.

The costs for the initial two wells, which did not show sufficient productivity for the planned plant, were around SH1.2 billion ($11.8 million). The plan of the project is to develop a 70 MW geothermal power plant, to be expanded to 140 MW later. The cost of an exploration well is estimated at Sh600 million, said Centum director of developments, David Njoroge.

“The next well we are sinking we need discharge that is sustainable that we can hook onto our power plants. We want to do the three wells first,” said Mr Njoroge.

He said the firm could ramp up its exploration activities if the planned sinking of additional three well does not lead to productive discharge.

“Depending on the productivity of the next three, we will decide how many more we will drill,” said Mr Njoroge.

The Centum subsidiary signed a power purchase agreement with Kenya Power in August 2015.

It completed drilling two exploration wells and proved the existence of the geothermal resource in December 2015.

“It is anticipated that AGL will commence production drilling and power plant construction for the first phase 70 MW in early 2020 and achieve commercial operation in early 2022,” he said.

In respect of the second 70 MW phase, Mr Njoroge said the firm anticipates that in it would simultaneously start the exploratory studies and drilling aiming to deliver the second phase of the project by 2024.

Mr Njoroge said as a clear show of commitment, the shareholders have to date invested more than $30million (about Sh3billion) to fund project development.

“Additionally, the project has received significant global attention and has secured the support of US development agencies and the African Union through milestone grant funding.”

UPDATE:

Following this article and coverage in Kenya, Centum Investment published a statement on its investment in Akiira Geothermal.

The statement, which can be downloaded here (pdf), shares details on progress on the project as of today, as well as the current status and next steps.

The key take away is that it is not abandoning the project and that the company “is working towards further drilling in Q4 of 2018 to complete exploratory drilling and achieve target financial close by Q4 2019. AGL is in advanced stages of organizing the project finance from various lenders and the award process for both the Engineering, Procurement and Construction (EPC) and Operations and Management (O&M) contracts is expected to be finalized with financial close of the project.

It is anticipated that AGL will commence production drilling and power plant construction for the first phase 70MW in early 2020 and achieve commercial operation in early 2022.

In respect of the second 70MW phase, it is anticipated that in 2020 AGL will simultaneously start the exploratory studies and drilling aiming to deliver the second phase of project by year 2024.”

Source: Daily Nation