Firm signs 25-year deal for supply of power
What you need to know:
- The deal with Kenya Power will last for 25 years and paves the way for the company to start constructing its plant.
- GDC started drilling for steam at Menengai in 2012.
A consortium led by a TransCentury Limited subsidiary on Thursday entered into an agreement with Kenya Power for the purchase of 35 megawatts of geothermal energy to be generated at Menengai.
OrPower Twenty Two comprises Civicon, a subsidiary of TransCentury, Symbion Power and Ormat Technologies.
It is among three independent power producers that have been tasked with setting up geothermal plants of equal capacity at Menengai. Others are Quantam Power East Africa and Sosian Energy.
This capacity is expected to increase national installed capacity from renewable sources by nearly 10 per cent.
The deal with Kenya Power will last for 25 years and paves the way for the company to start constructing its plant.
OPERATING THE PROJECT
“We are excited to contribute from Ormat’s expertise in geothermal industry in building and operating this project. Upon completion of the Menengai project, more households in Kenya will gain access to cost-effective and clean power from geothermal resources,” Ormat chief executive Isaac Angel said.
Last month, the trio signed agreements with the Geothermal Development Company for the supply of steam.
This followed a Sh1.1 billion partial risk guarantee issued to them by the African Development Bank (AfDB) to protect them in the event that the GDC and Kenya Power fail to honour their obligations.
PARTIAL RISK GUARANTEE
AfDB said the partial risk guarantee would enhance credit to the project and secure cash flows to enable the IPPs to make timely repayments of their debt.
GDC started drilling for steam at Menengai in 2012, and has set a target of an additional 360 megawatts of steam from the field by 2016.
It plans to extract 200 megawatts from Baringo County’s Silali field and another 150 megawatts from the Suswa prospect.
