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Tender extended: 140 MW geothermal plant under PPP model for KenGen, Kenya

Olkaria geothermal plant, Naivasha, Kenya (source: Lydur Skulason, creative commons)
Alexander Richter 13 Feb 2020

KenGen has extended the tender deadline for the request of qualifications of bidders for the 140 MW PPP geothermal power project at Olkaria, Kenya to 21 February 2020.

Kenya Electricity Generating Company (KenGen) has extended its tender/ request for qualifications of bidders for the financing, design, supply, construction, commissioning, operation and maintenance of the 140 MW Olkaria PPP geothermal power project at Olkaria, Kenya on a Build, Own, Operate, Transfer (BOOT) basis.

  • Tender Number: KGN-BDD-010-2019
  • Date Published: 5 November 2019
  • Date Tender Closes: 21 February 2020 – 10:00
  • Tender Opening Date: 21 February 2020 – 10:30

To achieve its capacity expansion plans, KenGen is working in close collaboration with the National Treasury to develop a 140 MW greenfield geothermal power plant through a Public Private Partnership (PPP).

Kenya approved a framework for developing and implementing infrastructure PPPs under the PPP Act of 2013 (the “PPP Act”) which led to the promulgation of PPP regulations in 2014. Legal and environmental/social due diligence demonstrates that there are no significant obstacles to the Project’s development and implementation.

The Project is expected to be a cost effective and environmentally-sound option for meeting Kenya’s base load energy needs utilizing Kenya’s substantial endowment of geothermal resources. The Kenyan National Treasury and KenGen selected K&M Advisors to serve as the Transaction Advisor for the Project and K&M is assisting KenGen with an international competitive tender process to select a private sector partner to implement the Project. As part of this process a Request for Qualifications will be issued to interested companies and a Request for Proposals (“RFP”) will be available to qualifying bidders.

The Project encompasses the development of a geothermal power generation project including all support facilities on a Build, Own, Operate, Transfer (BOOT) basis. KenGen shall be responsible for providing steam under a 25-year steam supply agreement (the “Project Agreement”) and the Kenya Power and Lighting Company (KPLC) shall purchase electricity under a long-term agreement from the Project under a 25-year power purchase agreement (the “PPA”). The Project will be developed through a special purpose vehicle incorporated under Kenyan Law (the “SPV”). KenGen shall have the right to make a cash investment in the SPV constituting an ownership participation of 25% in the SPV. The diagram below presents the institutional arrangements for project implementation, and the text that follows describes the roles and responsibilities of each agency or entity involved.

Tender details via KenGen website