Govt shortlists 22 bidders for coal, LNG plants

January 27, 2014
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Energy Cabinet Secretary Davis Chirchir says that his ministry received expression of interest from 36 companies for the Dongo Kundu LNG facility and 26 for the Lamu plant with the ministry shortlisting 10 companies to compete for the Lamu Coal power plant while 12 companies for the Dongo Kundu LNG plant/FILE
Energy Cabinet Secretary Davis Chirchir says that his ministry received expression of interest from 36 companies for the Dongo Kundu LNG facility and 26 for the Lamu plant with the ministry shortlisting 10 companies to compete for the Lamu Coal power plant while 12 companies for the Dongo Kundu LNG plant/FILE
NAIROBI, Kenya, Jan 27 – The government has issued request for proposal documents to successful bidders for the 960 Megawatts (MW) thermal coal power plant in Lamu and 700MW Liquefied Natural Gas (LNG) thermal power plant to be located in Dongo Kundu in Mombasa.

Energy Cabinet Secretary Davis Chirchir says that his ministry received expression of interest from 36 companies for the Dongo Kundu LNG facility and 26 for the Lamu plant with the ministry shortlisting 10 companies to compete for the Lamu Coal power plant while 12 companies for the Dongo Kundu LNG plant.

The companies are required to show ability to raise at least $1 billion (Sh85 billion) at competitive terms and have strong balance sheets with a minimum of $200 million (Sh17.1 billion).

The successful bidders for the Lamu Plant include; Mitsui and Company limited, Shanxi International Electricity Group, Sinohydro Group, Shanghai Electric Power Company, Tata Power, Marubeni Corporation, Allrich International, Toyota Tutshu, Toyota power, Human Capital Investment Group.

The successful bidders for the Dongo Kundu LNG facility include: China Petroleum, Tata Power in consortium with Gulf Energy, Globlec, Mitsui and Company, Toyota Tutshu, Marubeni Corporation, Sumsang C and T, GMR Energy, Quantum power and GDF Suez.

Chirchir says winners of the tender will be based on the most competitive Feed-In Tariff as the successful investors will build, own and operate the plants, with an option to transfer to the government after recovering full value of investment.

“As we pick these documents today, competition has been structured. It will not be the debate of I’m the third largest power generator in China or in Europe, you could be big, but what are your costs? I want to know the cost of the power to the national grind, and if your cost is the most competitive you will be the winner,” he said.

The bidders are supposed to present their proposals in 80 days from Monday.

The Lamu project is supposed to be completed by 30 months while the Dongo Kundu LNG project is scheduled be completed in 24 months with the government only giving partial risk guarantee.

The two plants are part of Kenya’s ambitious plan of generating 5,500MW for injection to the national grid within the next three years in bid to make the country more competitive for investment.

“We need to lower energy costs, so as we make the country the preferred destination for investments in the region,” he said.

Kenya’s power system currently has a capacity of 1,664MW comprising of hydro (770MW); geothermal (241MW); thermal (622MW); co-generation (26MW) and wind (5MW).

The successful bidder for Dongo Kundu plant will be required to build a floating storage and re-gasification unit with sufficient capacity and infrastructure to supply natural gas to power plants using heavy fuel oil.

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