KenGen confident in securing outstanding $700 million
KenGen is confident it can secure the outstanding $700 million for the extension of Olkaria I and build of Olkaria IV. Both project total an additional 375 MW.
In news from Kenya, the country’s main electricity generator KenGen says it “is confident it can secure the outstanding $700 million for a major geothermal project to boost electricity output by a around a quarter in the power-hungry country.
An announcement could be made within months depending on institutions like the World Bank, managing director Eddie Njoroge said after signing a loan agreement with the Japanese development agency (JICA) for $323 million.
“We are hoping now for about $700 million from the rest of the financing agencies and the (Kenyan) government is contributing for the drilling which is about $300 million,” he told Reuters.
Part of the $1.3 billion project entails lifting electricity output at Kengen’s Ol Karia 1 plant to 140 KW from 45 KW. The rest of the 280 KW increase would come from its Ol Karia 4 plant.
Officials estimate Kenya can generate 7,000 MW from the vast reserves of steam which lie under the Great Rift Valley running across the country.
The country plans to raise the electricity generated from geothermal to a minimum of 5,000 MW by 2030, aiming to cut prices and ease dependence on hydro generation.
KenGen generates about 1,000 MW of electricity – 80 percent of Kenyan demand – with 700 MW of that coming from dams. It was forced to shut down a 40 MW hydro generation plant last year by drought, causing outages.
Electricity and demand is projected to rise in tandem with economic and population growth.
Njoroge said the company was also considering more joint ventures after picking South Korea’s Daewoo for a 600 MW coal-fired plant at the Kenyan coast.
KenGen raised 25 billion shillings in the largest corporate bond issue in east Africa’s largest economy to finance various capacity expansion programmes.
Njoroge said the firm may explore the possibility of another note in 2011.”