New investor planning development of 140 MW project in Turkana, Kenya
Lake Turkana, Kenya (source: flickr/ Wayne Feiden, creative commons)
Alexander Richter
16 Dec 2015
A mining firm is planning the development of a 140 MW geothermal project in Turkana country in the northwest of Kenya with an investment volume of around $400 million. Local authorities are though demanding a better collaboration to see permits being issued.
In late November this year, local news from Kenya report the planned investment of a private investor in the development of a 140 MW geothermal power plant in Turkana county in the Northwest of Kenya.
Olsuswa Energy, a company owned by Mayfox Mining’s chairman Manga Mugwe is seeking to construct the power plant at a cost of $402 million with planned transmission into the national grid. The capital is expected to be derived mostly in the form of debt funding from development banks and others, including DI Frontier Market Energy & Carbon Fund.
The group expects it will begin exploration work in the first quarter of 2016 with drilling to start a year leader. The first phase of 70 MW is then expected to start operation in 2022. The mining company is currently prospecting for gold and other precious metals in the region.
The project though now faces some challenges with an unclear situation surrounding support and cooperation with the government of the county.
The acting executive for Energy, Environment and Natural Resources accuses Olsuswa Energy of seeking to exploit geothermal resources without first signing a memorandum of understanding with the county government.
Olsuswa published a notice on November 16 calling on firms to tender for various services in relation to geothermal exploration in Turkana County.
The energy firm said it planned to construct a geothermal power plant to inject 140MW into the national power grid. Three weeks after publishing the advertisement, Turkana County has published a series of notices in local dailies stating that the county government and Olsuswa have neither reached an agreements nor signed an MoU regarding terms of engagement.
The county is now warning private firms against dealing with Olsuswa in relation to the exploration saying no agreements have been reached, especially with regard to the use of community land and its resources.
The MoU, the notice said, will involve the county government, local leaders and community representatives — who are custodians of the land and its resources.
“The public and private or potential investors dealing with Olsuswa Energy Ltd are hereby informed or advised accordingly that no agreements or MoU have been concluded with the said investor,” read the notice, by acting county executive Charles Lokioto Ewoi.
This showcases some of the challenges for developers in Kenya that face not only national legalities, but also political issues on the local level. But it seems both sides are trying to set any misunderstanding aside.
