Japan grants Kenya a $94m for refurbishment of Olkaria I geothermal units

Japan grants Kenya a $94m for refurbishment of Olkaria I geothermal units Olkaria geothermal plant, Naivasha, Kenya (source: Lydur Skulason, creative commons)
Alexander Richter 19 Mar 2018

Japan provides Kenya a loan of $94 million for the refurbishment of the Olkaria I Units 1, 2 and 3 geothermal power plants. With new turbines and new electrical systems, it is planned to bring capacity from 45 MW today to 50 MW when done in 2021.

Reported last week, Kenya is going forward with upgrades to its Olkaria geothermal power plants in Naivasha, having secured a loan of JPY 10.077 billion ($94 million) from japan

With this efforts, the country plans to increase the output of these plants with the first one built in 1981.

The loan agreement was signed on Friday, March 17, 2018 by Kenya’s Treasury Secretary Henry Rotich with Japanese officials.

The upgrade of the Olkaria I Units 1, 2 and 3 is planned to expand the capacity of the ageing steam-powered plant from 45 MW to  50.7 megawatts upon completion in November 2021.

“Considering that the project life of the original design is 25 years, the plant is already overworked,” said Mr Rotich, adding that the plant’s maintenance costs had grown even as electricity production dropped.  “The completion of the project will therefore enhance volume and security of electric power supply in Kenya and thereby create a conducive environment for investment.”

The plant rehabilitation will involve change of steam turbines and installation of new electrical systems.

Nairobi will repay the concessional loan at 1 per cent interest rate over a period of 30 years, inclusive of a 10-year grace period.

Since the project is funded by the Japan International Cooperation Agency (JICA), it gives Japanese firms an advantage in the bidding process.

Source: Business Daily Africa

Note: an earlier version of this article talked about the loan amount being Sh 9.53 billion ($380 million) while the actual amount is JPY 10.077 billion ($94 million)