Sh82bn geothermal power plant launched

An ambitious project intended to increase power generation by 40 per cent and cut Kenya’s energy dependence on rivers took off on Monday.

The Olkaria geothermal project, the biggest such plant in Africa, is expected to pump an additional 280MW into the national grid. The national power output is currently at 1,533MW.

It responds to the ever-rising demand, shifts production to a renewable source and addresses the unreliability of hydroelectric power, which is often affected by drought.

Launched on Monday by President Kibaki, it is the most ambitious energy project since independence.

Geothermal power is cheaper than hydro and diesel generation of power and with increased production comes the promise of lower priced electricity to the consumer.

“This project will firmly put Kenya on the path to Vision 2030, since affordable, reliable and adequate power are key to the attainment of this economic growth blue print,” President Kibaki said.

The project is expected to be complete in 2014 at a cost of $981 million (Sh82.4 billion) financed by KenGen, the Government of Kenya, the World Bank, the German Development Bank (KfW), the European Investment Bank, the French Development Bank (AFD) and the Japan International Cooperation Agency (Jica).

It is part of the government plan to raise power output to 3,750 MW by 2018 and more than 15,000MW by 2030 to meet growing demand in line with Vision 2030.

The plant will be the second biggest infrastructure project after the multi-billion Lamu Port and the Lamu-South Sudan-Ethiopia Transport (Lapsset) corridor unveiled by President Kibaki and the Heads of State of Ethiopia and South Sudan earlier this year, and which is priced at Sh1.5 trillion.  

The main plant will be built by a consortium of contractors comprising Japan’s Toyota Tsusho Corp and South Korea’s Hyundai Engineering & Construction. 

Sinopec of China is also on site, developing a steam field. The construction of a substation and transmission is in the hands of KEC of India.

KenGen said it was completing other preparatory stages, including relocating families that will be displaced by the project.

According to its timelines, local infrastructure and resettlement of people around the project, which began last month, should be completed by February next year.

The government has placed emphasis on geothermal power generation and other sources of electricity because the country does not have enough power reserves to cater for unexpected breakdowns, the President said.

He pointed out that the government would not single-handedly raise resources needed for geothermal power exploration.

“We have put in place a conducive legal and fiscal framework to attract private sector participation in harnessing our robust geothermal resources,” he said.

He, however, expressed concern over the divisive politics in communities living in areas where oil deposits and other minerals have been discovered.

Already, the community in Turkana where oil was discovered have started warning immigrants from flocking the area, which is expected to grow once the mineral is fully exploited.

The community has been arguing that they should be given priority in the whole project as they are the “original owners”.

President Kibaki told the community that natural resources belong to all Kenyans, as provided for in the Constitution.

“I would like to remind all Kenyans that natural resources in all parts of the country belong to all Kenyans and not just the residents of those particular areas,” the President said.

He quoted Article 69 of the Constitution, which provides for sustainable exploitation, use, management and conservation of natural resources.

“It also guarantees the equitable sharing of the accruing benefits from these activities.”

Such benefits include rapid development of areas where the resources are found.

He was accompanied by ministers Kiraitu Murungi (Energy), William Ole Ntimama (Heritage) and John Munyes (Labour).

Others were assistant minister Magerer Langat and area MP John Mututho.