The Kenya Electricity Generating Company (KenGen) will now manage the 54.6 megawatts (MW) Garissa solar power plant.
The plant, built by the Rural Electrification Authority (REA) at a cost of Sh13.5 billion, will be commissioned later today.
It was scheduled for completion in September but has been delayed by interruptions in the construction of a power line to evacuate power from the plant. This saw REA experience difficulties in acquisition of land to put up the line.
It reached an agreement with the community whereby construction will go on as negotiations for land continued.
Electricity from the plant will be sold to Kenya Power at Sh5 per kilowatt hour (KWh) - a low rate that is almost comparable to the cheapest source – hydro.
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KenGen yesterday said it is currently discussing the terms of operating the plant with REA.
“REA has approached KenGen to run the 50MW solar plant in Garissa and negotiations are ongoing to establish the terms of the operations and maintenance contract,” said Rebecca Miano Chief Executive KenGen said in a statement.
The plant is the first commercial-scale solar power plant in Kenya and hyped as the largest in the region.
While power from the plant is affordably priced, it might not have a big impact on the retail price of power due to the small scale compared to the electricity demand in the country, which stands at about 1,800MW.
REA and Kenya Power had initially signed a power purchase agreement that put the cost of the electricity from the plant at Sh10 per unit, but the Energy Regulatory Commission declined to approve it on grounds that the plant would be built by a State-owned entity using a concessional loan.
Its pricing is in comparison to other planned solar power plants at Sh12 per unit. It is also in comparison to power from geothermal plants at Sh7 per unit.
KenGen said managing the plant on behalf of REA fits into its strategy of partnering with other power producers. “The company continues to explore with geothermal concessional licence holders of new fields,” said Miano.
The firm is planning to increase its capacity by 721MW by 2025, with geothermal, solar, wind and hydro plants. Among these is the 165MW Olkaria V that is set to be commissioned by mid next year.