Investment to unlock full value of geothermal wells

By JOHN NJIRAINI

State-owned Geothermal Development Company (GDC) has launched an assortment of investment packages in the energy sector that will see the country get an additional 800 MW by the year 2017.

In an ambitious plan aimed at tackling the perennial challenge of energy crisis, the company on Wednesday invited investors to implement eight geothermal plants estimated to generate 100 MW each.

"GDC will ashortlist potential investors to develop 8X100 MW at its Bogoria-Silali Block," said the company in a statement.

Poor rains

There are growing fears that continued reliance on hydropower is unsustainable in the long run and adds to cost of doing business. [PHOTO: FILE/STANDARD]

The statement says the projects, which will involve drilling of 200 wells starting January next year, are expected to be operational in 2017.

The move comes at a time when the country is staring at possible power shortage after the Meteorological Department announced the country might record below normal rains during the long rains seasons.

Already, there is fear that poor rains will hurt electricity generation, which is hugely depended on rain.

There are fears that in the event of power deficit, energy prices could increase significantly – thereby inflating the costs of doing business as the country resorts to thermal generation to avoid rationing.

According to GDC, the role of interested investors will include financing, design, construction, operation, maintaining power plants as well as partnering with the company in financing steam development.

The Government will not provide sovereign guarantees relating to the investments and investors must seek alternative guarantors.

"Interested investors/consortia shall establish that they have the capability to raise at least $400 million (Sh32 billion) for the development of at least 100 MW, supported by letters from credible financier(s)," said the statement.

Detailed studies by GDC show the Bogoria-Silali block has a potential to produce up to 3,000 MW.

The 800 MW would be produced in an initial phase ending by 2017 and another 1,200 MW would be rolled out in three-400 MW phases ending in 2023.

To date, Kenya has generates only 200 MW of electricity using geothermal though studies show the country has the potential to generate up to 7000 MW.