Land deal opens path for commencement of Baringo-Silali project, Kenya

Past week, residents of Baringo County in Kenya granted the country’s Geothermal Development Company (GDC) access to their land. This essentially removes a major hurdle to further geothermal development.

The deal now opens the commencement of the first phase of the Baringo-Silali geothermal projects in January next year. The project plans to develop up to 800 MW in geothermal power generation capacity.

The ongoing controversy regarding land rights, left donors, such as German development bank KfW uncertain about the progress and kept the money locked.

“The land pact paves way for completion of a legal opinion to KfW, and the subsequent disbursement of funds for the project,” said Mr Nchoe. He added: “Having reached an agreement with land owners, we are moving closer to breaking ground.”

Delay to strike a compensation deal with Baringo residents has significantly slowed down a project that has been on the card from 2008.

The first phase of the Baringo project that straddles Bogoria, Paka, Chepchuk, Korosi and Silali areas will cost about Sh310 billion ($3.1 billion) and inject 200MW to the national grid.

In all, the GDC hopes to develop the first 2,000 MW in four phases beginning with 800MW by 2017, 400 MW by 2019, another 400 MW by 2021 and the rest of 400 MW by 2023. The project to be completed under the public-private partnership model targets to supply power to Kenya, Uganda, Rwanda, Burundi and South Sudan.

The GDC had previously advertised for equity investors to jointly develop the Baringo steam field.

The KfW’s role in the project is to finance exploration drilling, one of the riskiest phases of geothermal development which – if successful – unlocks further financing.

Source: Business Daily Africa