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Senate team appeals for more geothermal funding for exploration in Kenya

Drilling crew at Menengai, Kenya (source: flickr/ GDC5000)
Alexander Richter 31 Mar 2014

The Public Investments Committee urges the Kenyan government to adequately fund geothermal exploration of GDC to ensure continued development for the benefit of lowering electricity costs to the public.

The Public Investments committee has urged the government of Kenya to adequately fund geothermal exploration to ensure power consumers enjoy lower tariffs, according to local news earlier this month.

In a report written after touring Geothermal Development Company’s (GDC) plants in Baringo and Nakuru counties last July, the Senate standing committee on energy, roads and transportation said the agency experienced delays in disbursement of funds from the government.

“There is adequate, sufficient and timely inflow of finances from financiers and donors but GDC experiences delays and unpredicted disbursements from the government.

“The government should adequately fund and support geothermal development to ensure that Kenyans enjoy lower tariffs,” read the report in part.

The committee noted that the Exchequer’s funding for GDC in the current financial year was Sh877 million for recurrent expenditure and Sh4.1 billion for development. This has created a funding gap and affected geothermal development programmes, it said.

For instance, recruitment of about 300 people to operate the company’s four exploration rigs cannot be done as the recurrent expenditure is not enough to facilitate this, the report said.

“The recurrent budget allocation for FY 2013/14 is Sh877 million ($10 million). GDC requires an additional Sh1.5 billion ($17 million) as recurrent allocation and also support the additional staff,” reads the report.

GDC was established in 2009 as a special purpose company with the mandate to develop geothermal steam for onward selling to power generators thereby reducing the risk for private investors in the geothermal sector.”

Source: Daily Nation