Plans by the Kenya Electricity Generating Company (KenGen) to set up the first phase of Olkaria VI 140MW power plant in Naivasha are in top gear.
This follows shortlisting of five bidders for the project.
The five are Ormat Technologies Inc, ITOCHU Corporation, Sumitomo Corporation, Enel Green Power and a consortium of Engie Energie Services, Toyota Tsusho Corporation, Kyuden International Corporation and DL Koisagat Tea Estate.
This follows the approval by the National Treasury to implement up to 560MW of geothermal power projects under the Public-Private Partnership (PPP) framework,
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The project entails rebuild-own-operate and transfer basis.
The evaluation of the bids will see the successful bidder enter into a joint venture with KenGen to finance, construct, own and operate the power plant and the associated facilities and transfer the project back to KenGen at the end of the operational term.
This will be the first PPP project to be developed by KenGen, with oversight from Treasury’s PPP Unit, and supported by transaction advisors.
The gazettement of the five bidders has set the ball rolling for the request for proposals stage set for June 2020.
The final winner will proceed to the third phase of the project that entails construction, after successful negotiations and execution of the required project agreements.
In the past, KenGen had financed its power projects through syndicated debt funding sourced primarily from multilateral and bilateral institutions, locally raised debt (infrastructure bond), own equity and state-to-state concessionary funding.