Senate team appeals for new geothermal funds
Public Investments Committee (PIC) Chair Adan Keynan (left) during a hearing session with GDC boss Dr Silas Simiyu at Continental House on March 18, 2014. The National Assembly will investigate the affairs of the company after it received a petition questioning the management of the state corporation. FILE PHOTO |
What you need to know:
- In a report written after touring Geothermal Development Company’s (GDC) plants in Baringo and Nakuru counties last July, the Senate standing committee on energy, roads and transportation said the agency experienced delays in disbursement of funds from the government.
- The committee noted that the Exchequer’s funding for GDC in the current financial year was Sh877 million for recurrent expenditure and Sh4.1 billion for development. This has created a funding gap and affected geothermal development programmes, it said.
A Senate committee has urged the government to adequately fund geothermal exploration to ensure power consumers enjoy lower tariffs.
This would reduce the cost of production and increase competitiveness of manufacturing industries, it said.
In a report written after touring Geothermal Development Company’s (GDC) plants in Baringo and Nakuru counties last July, the Senate standing committee on energy, roads and transportation said the agency experienced delays in disbursement of funds from the government.
REDUCED FUNDING
“There is adequate, sufficient and timely inflow of finances from financiers and donors but GDC experiences delays and unpredicted disbursements from the government.
“The government should adequately fund and support geothermal development to ensure that Kenyans enjoy lower tariffs,” read the report in part.
The committee noted that the Exchequer’s funding for GDC in the current financial year was Sh877 million for recurrent expenditure and Sh4.1 billion for development. This has created a funding gap and affected geothermal development programmes, it said.
For instance, recruitment of about 300 people to operate the company’s four exploration rigs cannot be done as the recurrent expenditure is not enough to facilitate this, the report said.
“The recurrent budget allocation for FY 2013/14 is Sh877 million. GDC requires an additional Sh1.5 billion as recurrent allocation and also support the additional staff,” reads the report.
GDC was established in 2009 as a special purpose company with the mandate to develop geothermal steam for onward selling to power generators thereby reducing the risk for private investors in the geothermal sector.
The fully government owned company has recently been on the spotlight following boardroom wars between the chairman Simon Gicharu and managing director Silas Simiyu over GDC’s multi-billion shillings procurement deals.
Last week, the parliamentary committee on public investments questioned Dr Simiyu on the company’s procurement of an additional drilling rig by single sourcing from a Chinese firm.
Questions have also been raised on the mode of funding for geothermal wells, loans taken by the agency and the sale of steam from the wells.
