Uncertainty hits 1000 MW Lamu coal plant

A programme by the Government to increase the country's power generation capacity to 5000 MW in 40 months now appears to be faltering.

This follows a tussle over who is to run a 1000MW coal plant in Lamu, pitting international firms against each other. Two Chinese firms, Shanghai Electric and HCIG Investments are competing for this tender against a group led by Gulf Energy.

The  giant plant will have a capacity to generate more than half of the country's current electricity consumption.

The future of the plant was further thrown into uncertainty when a planned meeting by Cabinet Secretary for Energy and Petroleum Davis Chirchir and Principal Secretary Engineer Joseph Njoroge to issue a status report on the project's tender failed to take place yesterday.

When reached for comment, the Chirchir said he needed to get a brief on the power plant first before giving details on the project. Efforts to get a comment from the PS were unsuccessful.

The expression of interest for development of the Lamu coal plant was first advertised on September 28 and closed on  October 25 last year.

A total of 26 submissions were received. Evaluation of the submissions was carried out between October 28 and December 16, 2013, out of which 10 firms were pre-qualified for submission of Technical and Financial Proposals.

Both the successful and unsuccessful bidders for expression of interest were duly notified on December 17, 2013.

The Lamu power plant will initially use imported coal, and later convert to use of locally developed coal from Mui Basin, Kitui County. Power generated from the coal plant will be sold to the Kenya Power & Lighting Company Limited (KPLC) under long term Power Purchase Agreements (PPA) framework.

The decision to invest in coal power plants comes after it dawned on the government that several planned geothermal plants might stall due to financial constraints.

Kenya requires a staggering $4 to 5 billion over the next three years to implement earmarked geothermal projects. To generate at least 5,000 MW from geothermal by 2030, the country requires a mind boggling $20 billion.

Government projections indicate that power demand will reach 15 000 MW by 2030. To meet the demand, the country must raise the current capacity of 1 664 MW to 18 000 MW.

Other ongoing and planned projects include Lake Turkana Wind Power Project, which aims at providing an additional 300MW of power to the national grid, expected to be completed towards the end of 2014.

These are in addition to planned expansion of infrastructure at the Olkaria Geothermal Power Plant a proposed coal power plant in Kilifi and oil and natural gas exploration in Turkana and off the Kenyan Coast respectively.

The Government is also seeking private investors to develop a 900-1000 (MW) coal fired power plant in Kitui County.

Business
Premium Ruto's food security hopes facing storm amid fake fertiliser scam
Real Estate
Premium Affordable housing: Will State's data-backed action now pay off?
Business
Premium Nairobi business community plans protest as over 700 containers held at port
By Peter Muiruri 50 mins ago
Real Estate
Premium Building to the skies, but at what cost?