Further details on KenGen plans for 280MW plants

Olkaria III geothermal plant, Kenya (source: emerging africa fund)

Alexander Richter 18 Jun 2010

As reported earlier, Kenya’s main power generator, Kenya Electricity Generating Company (KenGen), is seeking contractors to put up two geothermal power plants. With further details provided in a recent news piece from Kenya.

In the procurement notice, KenGen is inviting prequalification bids for constructing two power plants of 280 megawatts geothermal power generation capacity with steamfield, substations and transmission. Details on the Procurement Notice can be found here.

KenGen plans to raise its capacity to 3,000 MW iby 2028. Target until 1012 is 1,022 MW, 1,500 MW 2013-2018, 3,000 MW 2018-2028, 9,000 MW 2030 and beyond. It currently produces more than 200 MW from geothermal resources and more from hydro and other resources.

According to the news piece, “The company already producing more than 200MW of electricity from geothermal sources plans to add 280MW of geothermal power at a cost of Sh104 billion ($1.3 billion) by 2013.

KenGen said the government had received financing from the International Development Association (IDA), the Japan International Cooperation Agency (Jica) and the French Development Agency (AfD) for electricity expansion, the Olkaria IV, and 1 Additional Units Project.

“In addition, the Government of Kenya and the Kenya Power and Lighting Company (KPLC) have applied for financing from the European Investment Bank (EIB) and the German Development Co-operation (KfW) and intend to apply the proceeds towards payments under four contracts,” the company said.

KenGen in March signed a loan agreement with Jica for Sh25.84 billion ($323 million) and expressed confidence in securing the outstanding $700 million.

Part of the project entails boosting electricity output at KenGen’s Ol Karia 1 plant to 140 KW from 45 KW within finances from JICA.

The rest of the 280 KW increase would come from its Ol Karia 4 plant through finances from AfD and EIB.
The prequalification of bids should be made by July 20 with the invitation for bids for the four contracts expected to be made between September and February next year.

Energy is a key issue in the country with industrialists often protesting against unreliable and costly supplies.

“Looking ahead, the country’s greatest infrastructure challenge lies in the power sector, where a further 1,000 megawatts of generating plant are needed over the next decade, a doubling of current capacity,” a World Bank implemented programme on infrastructure, said this year.

“The Government will encourage through public private partnerships the development of about 500MW additional geothermal power capacity over the next four years, encourage development of biomass from municipality waste,” Mr Kenyatta said noting that such initiatives are expected to add about 800MW of power to the national grid by 2014.

Projections by the Energy ministry showed that Kenya requires at least additional 2,013MW to the national grid by 2014.

“The supply deficit and costly short-term interventions constrain economic growth and reduce the regional competitiveness of Kenya’s private sector,” the World Bank said in a statement a fortnight ago when it approved a Sh26 billion loan to help the country expand its national grid and support emerging geothermal power generation.

“The gap between electricity supply and demand has increased in recent years due to Kenya’s strong economic growth and inadequate investment in power infrastructure,” it said.

Data show that at the peak of the recent drought, the country’s power reserve capacity wilted to record levels, triggering fears that the country is likely to run short of power from 2012 if new plants did not come through.”

Source: Business Daily Africa