Geothermal expected to meet half of Kenya’s energy needs
Posted Thursday, November 24 2011 at 20:13
- Government has been wooing investors to support financing of the project that will require about $4.5 billion to generate 1,200MW
Kenya plans to obtain half its electricity from geothermal by 2018, to meet rising demand and cushion against the uncertainty of hydro-power.
As a result, the government has been wooing investors during the geothermal conference held this week at Kenyatta International Conference Centre.
“We want to shift into alternative sources of power that will provide cheaper electricity. Geothermal energy has high initial investment but provides cheaper electricity in the long-run,” said KenGen managing director, Eddy Njoroge.
He added that the company will need to raise at least $4.5 billion to generate 1,200 MW from geothermal wells in Olkaria and Menengai.
Kenya has an estimated potential of between 7,000 MW and 10,000 MW of geothermal energy, but only 200 MW is exploited.
The country’s power demand has been growing at eight per cent yearly, leaving a small reserve margin of about five per cent that is wiped out when there is drought.
Local and international private investors are expected to speed up exploitation of geothermal energy to achieve the 17,000MW target set for 2030.
Mr Njoroge said all options to raise investment will be explored.
“We need 4,000 MW from geothermal by 2030. We are looking at various options for financing this project,” Mr Njoroge said.
Energy Minister Kiraitu Murungi said several investors had shown interest and agreements with companies from China, Korea and Japan have been signed to start the fourth phase of Olkaria geothermal power in 2013.
He invited foreign investors to help the country exploit the energy, adding that the government will review Sessional paper No. 4 to align it with the new Constitution on clean energy.
Some investors have been demanding sovereign guarantees before they invest in energy projects.