Shortage of chash slows down geothermal exploration in Kenya

Shortage of chash slows down geothermal exploration in Kenya GDC drilling site at the Menengai crater, Kenya (source:
Alexander Richter 6 Sep 2011

Exploration in Kenya falls behind schedule due to funding hiccups, according to the Geothermal Development Company. It is now negotiating with the Treasury for more funds.

Kenya news report that “plans to open up new exploration sites for geothermal power development have fallen behind schedule because of funding hiccups.

The Geothermal Development Company (GDC) said it had since 2009 concentrated its activities around the Menengai area in Nakuru, saying it was in negotiations with the Treasury for more funds.

GDC managing director Silas Simiyu said the company had a shortfall of Sh7 billion and Sh12 billion ($130 million committed by the French Development Bank (ADB) would likely to be disbursed in January.

Discussions between the Treasury, the budget and energy committees of Parliament were also likely to yield new allocations from the Treasury. The company was allocated Sh16.1 billion, nearly a quarter of the money earmarked for the energy sector, during the Budget presented in June.

The company intends to drill 200 wells in the Baringo, Bogoria, Paka, Chepchuk, Korosi and Silale areas. Nine other wells are to be drilled in the OlKaria fields .

The cost of drilling one well is estimated at Sh585 million ($6.5 million), while a piece of generation set is estimated at Sh765 million ($8.5 million).

GDC undertakes the upstream work before handing over proven sites to developers as a way of attracting investors to the highly capital intensive sector.

The ministry of energy projects that implementation of the geothermal power projects in Kenya will require investments of up to $650 million (Sh58.5 billion).”