A Sri Lankan company has won the tender to construct a Sh1.3 billion ($15 million) hydropower plant for four tea factories in Nyeri County.
VS Hydro has 30 months to set up and hand over the 5MW Gura power project to farmers affiliated to Gathuthi, Gitugi, Iriaini, and Chinga tea factories.
Since landing its first contract in 2008 in Uganda, the firm has been making inroads into the East African Community, where the quest for renewable energy is gaining pace.
VS Hydro has constructed and commissioned the 18MW Mpanga hydropower plant in the west of Uganda and Nyagak hydropower project in West Nile.
In Tanzania, VS Hydro has signed a contract with the Catholic diocese of Njombe to set up of a 10MW plant. It has tendered for more business in Rwanda, too.
The award gives VS Hydro a foothold into the Kenyan market at a time when the country is seeking to meet its energy requirements.
According to managing director Prabodha Sumanasekera, his firm is working out modalities of starting its own hydropower plant along River Mutonga in Meru County.
“We have over 40 years’ experience in hydropower. In Sri Lanka, we have four such plants that generate a total of 10MW. We are increasing it to 20MW,” he told Smart Company.
Mr Sumanasekera said the firm integrates all aspects of hydropower projects from designing and manufacture of equipment to power generation.
The directors of the Gura hydropower company handed over the site to the contractors last week, setting work in motion.
“This is a process that started in 2006 and what farmers have been waiting for is now beginning to bear fruit. It’s an assurance to tea farmers that their money has been safe. They should now pay the last instalment,” said the chairman, Mr Ephantus Mukundi.
The scope of work includes construction of an intake, dredging of a 7.7 kilometre canal, and construction of a powerhouse and transmission line to the four factories.
The project is significant to the multi-billion shilling tea industry since power bills have been eating into farmers’ earnings. On average, the 65 factories under the management of Kenya Tea Development Agency pay about Sh2 billion for energy, with each spending between Sh35 million and Sh40 million.
This cost will now be slashed with the commissioning of the power plant by January 2014.
“Each of the factories will use 0.5MW, which will leave them with three megawatts to sell to Kenya Power. It will help stabilise electricity supply in Nyeri,” said Mr Lucas Maina, the KTDA Power Company general manager, the managing agent for farmer-owned hydropower projects.
Growers are increasingly investing in their own power plants to stem the high energy costs incurred in processing green leaf. Apart from Gura, nine other plants are lined up for development in various regions.
“The mandate of KTDA Power Company is to come up with projects that reduce the cost of energy for farmers. We have started with hydropower because, apart from reducing the cost of production, we are also looking for business opportunities,” said Mr Maina.
He added that it would take between six and seven years for the farmers to recoup their investment.
The agency is pre-qualifying engineering, procurement, and construction contractors for other small hydropower plants.
They include North Mathioya in Murang’a (5MW), Chania in Kiambu (0.6MW), Iraru in Meru (1.3MW), and Lower Nyamindi in Kirinyaga (1.5MW).
Imenti factory, which was the first to commission a 1MW plant two years ago, uses 60 per cent of the power and sells the rest.