Drilling contract signed for 70 MW geothermal development in Ethiopia
Kenya Electricity Generating Company (KenGen) and Shandong Kerui Oilfield Service Group have secured a $76.8million drilling contract for the 70 MW Aluto-Langano geothermal power project by state-owned utility EEP in Ethiopia. The project is funded by the World Bank.
State utility Ethiopian Electric Power has awarded a geothermal drilling contract to a Chinese-Kenyan group. The group includes Shandong Kerui Oilfield Service Group and Kenya Electricity Generating Company (KenGen).
The contract foresees the drilling of 22 wells for the 70 MW Aluto-Langano geothermal power project in the country. Part of the contract are the supply of drilling materials as well as drilling wells for possible geothermal energy sources in central Ethiopia.
The country’s current installed capacity is 8 MW at Aluto-Langano that is though currently not operating.
The overall investment for the complete 70 MW development is estimated at USD 173.2 million covered by the World Bank through loans and grants. The drilling is expected to cost around USD 76.8 million and funded by a loan of that amount by the World Bank.
“We are delighted to announce that our diversification strategy is finally paying dividend. This is good news for KenGen, our shareholders and indeed for Kenya as a country,”Rebecca Miano, CEO of KenGen.
“As we extend our services to Ethiopia, we are leveraging on our expertise, in depth knowledge of the African Rift Valley and close to four decades of successful drilling experience,” she added.
“The project will be implemented in two phases, phase I which is purchase of drilling rigs, and phase II which entails provision of drilling.” KenGen is supplying about 30 percent of the component of phase II, which translates to about $6.2 million.
Ethiopia has been a hot market for geothermal development, while delay in power purchase agreements has delayed private development for some years. The overall geothermal potential of the country is estimated at around 10,000 MW.
Private developers are pushing geothermal development with projects at Corbetti, Tulu Moya and other areas of Ethiopia.