As a follow up to the news published recently on Africa making positive strides in the energy sector, we observe that Kenya’s main electricity producer KenGen, is also doing its part to see through its expansion plans. The power generator is reported to be in the process of looking for an adviser to help it secure financing for the development of a 140MW geothermal plant.
“We hope to have picked the transaction adviser by the end of July after which the firm will start preparing the tender documents including how we will evaluate potential investors,” said Albert Mugo, KenGen Chief Executive Officer.
KenGen the 70% government owned company has installed capacity of 1,252 megawatts out of Kenya’s total 1,767MW. It aims to add another 844MW to the grid by 2017 as part of a broader national power expansion program in which the government targets installed capacity of 5,000MW by then, in a bid to boost growth.
Given that about 46% of Kenya’s capacity is from hydropower generation, solely from KenGen, this has made the country prone to high energy costs in times of droughts.
Low hydrology levels, as is the current situation, have prompted increased usage of diesel-fired thermal power capacity of which the fuel cost is passed on to the consumer, increasing their burden.
As such, much of the new power supply will come from geothermal sources, tapping underground steam from the Rift Valley.