Firm extends bids for steam power
Posted Monday, August 27 2012 at 17:34
- Geothermal Development says that the low number of contenders that it received forced it to allow for more time in the hope of attracting more companies to take part in exercise
- The tender requires companies to demonstrate capability to mobilise a minimum of $200 million (Sh16.8 billion) to develop 200 megawatt of steam accompanied by letters from credible financiers
- Those successful will be engaged on a joint venture with the government for development of 200 megawatt steam each with the latter assuming the risk for failed wells
The Geothermal Development Company (GDC) has extended the closing date for two tenders for development of 800 megawatt steam each at Bogoria and Menengai fields due to the low number of bidders.
GDC told Smart Company that the move was meant to allow bidders more time to “prepare” documents.
It also allayed fears that the extension would result into delayed implementation of the steam project which is to be used in generation of geothermal power, considered cheaper than thermal sources and a long-term solution to frequent power shortages during droughts.
“GDC received several requests for extension citing the need for more time for bidders to prepare bid documents. In order to allow for competition, GDC decided to extend the closing date. This extension is way within our timelines since the selection of preferred investors is expected to be completed in July 2013,” said Ms Ruth Musembi, GDC communications manager in a statement.
The tender requires companies to demonstrate capability to mobilise a minimum of $200 million (Sh16.8 billion) to develop 200 megawatt of steam accompanied by letters from credible financiers.
In addition, bidders are required to demonstrate experience in developing a project of at least 30 megawatts over the last 10 years.
Attempts to contact the Public Procurement Oversight Authority to shed light on the extension were unsuccessful as neither calls nor emails to the authority were answered.
GDC is seeking four equity investors to develop 800 megawatt steam at Menengai, in the second phase of development at the field.
Those successful will be engaged on a joint venture with the government for development of 200 megawatt steam each with the latter assuming the risk for failed wells.
According to the initial tender notice, GDC would contribute between 20 and 40 per cent of the required capital for each of the projects.
“It is a public private partnership. Under this joint steam development project, GDC will obtain all land rights, permits and undertake construction of the road network, drilling water reticulation system and drilling exploration wells to confirm the presence of the resource,” said Ms Musembi.
Both tenders have earned an additional two weeks with the new closure dates for Menengai phase II and Bogoria Silali block phase I being September 17 and September 21, 2012 respectively.
To date, GDC has developed 354 megawatts of steam out of 59 wells at the Olkaria geothermal field, part of which is scheduled for use in the 280 megawatt geothermal plant being set up by State-owned power generation company KenGen.
According to the company’s records, an additional seven wells have been drilled at the Menengai steam field with four that drilled yielding 25 megawatts of steam.