KenGen moves on 700 MW target with new plant leasing contract

KenGen moves on 700 MW target with new plant leasing contract Olkaria 3 plant, Kenya
Alexander Richter 28 Sep 2015

KenGen confirms a leasing contract for geothermal power plants expected to add 50 MW in geothermal power generation at the Olkaria field in Kenya by the end of 2016.

Reported locally, a contested tender for a leasing project of up to 50 MW of geothermal power generation at the Olkaria field in Kenya, has been confirmed in late August 2015.

KenGen has contracted three local and international companies to do the job at an estimated cost of Sh21 billion ($200 million) and is expected to be complete by November next year. Toshiba Corporation of Japan, Rentco East Africa Ltd and Lantech Africa, were contracted to lease, operate and maintain the wellheads at the Olkaria Geothermal field for 15 years. The tender win by the three companies had been contested by other bidders but the Public Procurement Oversight Authority (PPOA) gave the lease plans a clean bill of health on August 21, 2015. “This will be a big boost to the 430 MW of Geothermal power we already produce at Olkaria. We expect work to begin fourteen months after signing the lease,” said KenGen Managing Director, Mr Albert Mugo.

Already, 10 steam turbine generators are operational in the Olkaria fields. KenGen has 248 geothermal wells so far and more wells will be rehabilitated in the next three years when the company will have achieved its 700 MW target. 14 prospective sites Mr Mugo said the parastatal will earn its money from the difference in the cost of leasing and the revenue from the electricity generated from the leased wells which will be sold to Kenya Power.

The project’s tender documents show the three companies had convinced the parastatal that the revenues from the deal will be at least Sh850 million ($8 million) every year.

Currently, KenGen is finalizing the installation of 75 MW of geothermal wellhead power generation at Olkaria.

Source: Standard Media