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KenGen secures Sh5.8 billion deal to drill geothermal wells in Ethiopia

By James Wanzala | October 25th 2019
Kenya Electricity Generating Company PLC (KenGen) Managing Director and CEO, Mrs Rebecca Miano (right) with Tulu Moye Geothermal Operations (TMGO) Chief Executive Officer, Mr Darrell Boyd soon after signing the contract in Addis Ababa, Ethiopia.

Kenya Electricity Generating Company PLC (KenGen) has clinched a Sh5.8 billion contract to drill 12 geothermal wells in Ethiopia.

The contract with Ethiopia’s independent power producer Tulu Moye Geothermal Operations (TMGO) PLC will also include installing a water supply system and equipment.

KenGen will supply drilling materials and also provide operation and maintenance services for both the drilling equipment and the water supply system.

Speaking about the multi-million-shilling project, KenGen Managing and CEO, Mrs Rebecca Miano, said it was the second and the company’s largest consultancy outside Kenya.

In February this year, KenGen won a contract to drill geothermal wells for the Ethiopian Electric Power (EEP) in Aluto, Ethiopia.

The contract in Aluto is for the implementation of drilling rigs and accessories as well as rig operation and maintenance for drilling geothermal wells. It is financed by the World Bank through a loan to the Ethiopian Government to the tune of USD 76,801,344 (about Sh7.6 billion)

The project is being implemented in two phases; Phase I comprises the purchase of drilling rigs while Phase II entails the provision of drilling services. KenGen is supplying about 30 percent of the components of Phase II which translates into about USD 6.2 million (about Sh620 million).

Speaking on the new deal with Tulu Moye, the KenGen MD said: “This project entailed intense negotiations and planning. We are excited our efforts bore fruit. Being fully aware of the task ahead of us, we have rolled our sleeves and are now all set and ready.”

KenGen, which has embarked on a diversification strategy, leverages its expertise in geothermal energy by offering commercial drilling services, geothermal consulting and other related services across Africa. The organization is also exploring expansion opportunities and will in the near future extend to oil and mining sectors in the region.

KenGen has invested in experts with considerable experience in geothermal exploration and drilling and will build the capacities of teams from Ethiopia who will be working on the project. The company also has a Geothermal Centre of Excellence which conducts training programs for both local and international students.

Kenya is Africa’s number one geothermal energy producer and among top 10 in the world. The country has an estimated potential of 10,000MW along the Rift Valley.

KenGen has a geothermal installed capacity of 698MW and is the leading geothermal power producer in Africa.

During the company’s last financial year, revenue generated from geothermal power plants increased from Sh16.1 billion in 2017 to Sh17.1 billion in 2018, which was a growth of six percent.

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