Three Power Firms Selected To Construct 100MW Geothermal Plant In Kenya

Kenya’s Geothermal Development Company (GDC) has selected three companies to construct 100 megawatt geothermal plants in Menengai, Rift Valley in the East African country in furtherance of its mission to produce 5,000 megawatts of electricity by 2030.  The three companies picked by GDC include; Quantum Power, New York Stock Exchange (NYE)-listed Ormat Technologies, and local firm Sosian Energy.

According to GDC, the three independent power producers were selected from the 12 bids submitted last September at the close of the tendering process.  Ormat, chosen through its subsidiary OrPower 4, and the other power companies are to build 35 MW steam power plant each under a build-own-operate model, starting this December.

Following its decision, GDC signed a deal with the IPPs, who will construct the power plants estimated to cost about Sh4 billion each. The IPPs will be supplied steam by the state-owned company at Sh3.05 ($0.04) per kilowatt hour, forming part of earnings expected to help reduce GDC’s dependence on government and boost drilling activities in other geothermal fields in South Rift’s Suswa and Baringo in the North Rift.

The completion of wells drilling, which would supply steam to the power plants, is expected by end of the year.  Investors will deliver power at Sh7.40 ($0.085) per kilowatt hour excluding value added tax, according to tender documents viewed by the media outfit, a report by local news daily, Business Daily confirmed.

Power is currently delivered at Sh17.20($0.2), but it may go as low as Sh9.10 ($0.1) kWh on completion of the power projects.  With power set to be delivered at cheaper rates;  with the utilization of alternative sources like wind, liquefied natural gas and geothermal;  the cost of doing business in Kenya is expected to reduce in East Africa’s largest economy, with subsequent unprecedented growth expected in the near future.  The 100 megawatts of electricity expected from the IPPs will be added to the national grid by the end of 2015.

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