KenGen to seek bids for $2bn financing for up to 560 MW addition at Olkaria
45 MW Olkaria I geothermal power plant, Kenya (source: bgr.bund.de)
Alexander Richter
22 May 2013
KenGen is preparing a financing tender for up to $2 billion for additional geothermal development of up to 560 MW at Olkaria, Kenya.
Local news report that, Kenyan power company KenGen is preparing a financing tender for up to US$2billion (Sh165billion) for a new geothermal power project expected to generate 560 megawatts of power.
KenGen Managing Director Eddie Njoroge says that the “bids will be for both financing and joint-ventures with KenGen”, and that the project “might be bigger than the current 280MW power project being carried out at Olkaria 1 and Olkaria 4.
Njoroge said the bids will be sent out by September this year. “We have prequalified bidders for that,” Njoroge said. “We will be sending out the RFQs (requests for proposals) by September this year.”
The RFQs are being prepared by the firm’s new financial advisors that include Barclays (ABSA Capital, Barclays PLC, Barclays Bank of Kenya), K PMG, Hamilton, Harris and Mathewws, and Dyer and Blair investment bank.
The move comes after a consultant hired by KenGen indicated that the OlKaria area had potential to generate an additional 560MW of power.
Njoroge said the current 280MW will likely be scaled up to 350MW owing to surplus steam from the wells and savings on the US$1bn project.
The project estimated an average of 5MW per well drilled indicating it would need to drill a total of 56 wells to generate 280MWe.
Several wells drilled have shown much higher potential than that with some showing over 15megawatt equivalent (MWe). The company will be able to achieve the target with fewer wells drilled. Each well costs about US$6million to drill.
Njoroge said the savings generated by the project will be used to put up an additional 70MW plant alongside the four being constructed by Hyundai engineering for the project.
“We actually have an extra US$300million (Sh24.9bn),” Njoroge said. Procurements rule will require tendering rather than use the current contractors to do the extra unit. Kengen generates about 1300MW of power; 800MW from hydro, 300MW thermal and 200MW geothermal.
In addition to the 350MW geothermal project, it is putting up a 300-600MW coal-fired plant at the Coast expected to come online by 2017.”
Source: AllAfrica
