NAIROBI, Kenya, Jul 5 – As the country moves to tap into the largely unexploited geothermal potential, the government plans to generate 140 Megawatts (MW) every year beginning 2013.
Kenya Electricity Generating Company (KenGen) Managing Director Eddy Njoroge said on Monday that they were already sourcing funds to put up geothermal projects that will eventually see the country attain its goal of producing 5,000MW in the next 20 years.
“This is just the beginning of our geothermal journey. That is why GDC (Geothermal Development Company) will be going forward to do the drilling and KenGen and other IPPs (Independent Power Producers) will then build the power plants,” the MD said.
Plans to build and upgrade two power plants at Olkaria I and IV which have a combined output of 280 Megawatts are at an advanced stage with the project expected to get underway next year.
“The total project cost is about $1.3 billion (Sh104 billion). We have the consultant on board and he’s doing the tender documents right now; we also hope to have a contractor by early next year,” he said of the project that is scheduled to take two years to complete.
It is estimated that the country has an estimated capacity of 7,000MW from geothermal energy alone but currently generates less than 200MW. This has seen huge amounts of funds injected into this area to promote the development of clean energy and ensure availability of affordable power in all seasons.
Development partners such as the Japan International Cooperation Agency (JICA), Agence Française de Développement (AFD), European Investment Bank and the World Bank have in the last few months pumped billions of shillings in geothermal production.
The rationale behind such investments has also been prompted by the realisation that limited access to modern energy impacts negatively on Kenya’s economic growth.
A recent survey by the World Bank dubbed the ‘African Infrastructure Country Diagnostic’ showed that Kenya loses approximately 1.5 percent of its GDP growth every year as it is not able to meet the modern energy needs of the economy.
Mr Njoroge spoke after Finance Minister Uhuru Kenyatta signed a credit agreement of Sh26.4 billion with the World Bank’s International Development Association out of which Sh9.6 billion will go towards investments in geothermal power generation.
“This is a strategic long term investment program focused towards increasing our energy output through the exploitation of our enormous geothermal power potential in the country,” said the Finance Minister.
This is also part of the Kenya Electricity Expansion Project with an estimated cost of Sh112 billion which will see transmission lines constructed, electricity distribution network expanded and the slum and rural electrification programmes enhanced.
Mr Kenyatta also signed additional concessional loans worth Sh17.9 billion with the World Bank and the French government through AFD, to fund various projects including the upgrading of about 6,000 dispensaries, health centres and district hospitals.
Part of the money will also be used to put up a regional laboratory which will, among other things, bolster diagnosis and surveillance of communicable diseases in East Africa.
World Bank Country Director Johannes Zutt pointed out that as the region continues to open up its borders, the outbreak of diseases was inevitable thus the need to equip partner states with the necessary capacity to curb and deal with such issues.
“The East Africa Public Health Laboratory Networking Project will empower health authorities from Kenya, Uganda, Tanzania and Rwanda to communicate outbreak-related information across national borders in real time,” Mr Zutt said adding that this would lead to improved health benefits for East Africans.
Tanzania, Uganda and Rwanda will receive $15 million, $10 million and $15 million respectively for the project.