, NAIROBI, Kenya, Feb 29 – The Kenya Electricity Generating Company (KenGen) is mulling a move to the capital markets to raise funds for the construction of a wind plant in Isiolo.
Managing Director Eddy Njoroge explained that the proposed plant is still in the design stage and as such would not divulge finer details of the project such as the capacity of the facility and how much it would cost to put it up.
“We are not yet sure which way we will raise the funds… it could be through an infrastructure bond offer or any other way of raising money from the public,” he disclosed.
It is estimated that a 100 Megawatts (MW) wind plant would cost approximately Sh16.5 billion or $200 million to construct.
“We are hoping that we will be able to start the Isiolo wind (plant) this year and we will therefore be looking for funding. We will be looking at a joint venture or a BOT (Build Operate and Transfer initiative),” Njoroge added.
Going by the company’s success in 2009 where it raked in Sh26.6 billion against a target of Sh15 billion from the debt capital market, the MD exuded confidence that they would be able to replicate this performance regardless of which financing model they choose to raise the additional funds.
The firm completed the feasibility studies in December 2011 even as it continues to undertake wind measurements in 12 sites including in Bubisa, Marsabit, Naivasha and Kinangop.
The generation of cleaner and greener energy has been on KenGen’s radar as it seeks to reduce Kenya’s over reliance on hydro energy which currently accounts for 50 percent of the total power supplied.
Currently, wind and biogas energy contribute two percent of the 1,660 MW in installed capacity although KenGen hopes to significantly scale this figure to enable it to generate about 1,600MW by 2030.
This, Njoroge said, would enable them to meet the growing energy demand, estimated at 15 percent per annum.
As at last week, the country’s peak power demand was at 1,222 MW compared to an installed capacity of 1,200 MW which points to the government’s inadequacy in energy provision.
However, all this is set to change once the planned and ongoing power generation projects come on stream.
KenGen’s plan to generate about 16,000 MW in the next 18 years in a bid to meet the demand estimated at 15,000MW in the same period.
This calls for the production of approximately 1,000MW every year, in a venture that though capital intensive would enable country to harness its massive potential for green energy.
KenGen’s five-year strategy, running from 2008-2012 and where it had sought to increase its capacity by 500 MW to stabilise the power situation in Kenya is coming to an end.
The next phase of geothermal expansion targets to generate a further 585MW by 2018, which will require the drilling of at least 168 geothermal wells in the Olkaria fields where huge steam potential has been confirmed.
Besides guaranteeing reliable power supply, such investments would translate into affordable power for Kenyans hence spurring the growth of the different sectors of the economy.
Njoroge spoke when releasing the company’s financial results for half year to December 31, 2011 where net profit rose by 32.9 percent to Sh1.19 billion.
The performance was credited to improved hydrology that the country experienced between October and December 2011 which positively impacted the company’s hydrology capacity.