Kenya must learn to interrogate credentials of potential investors

Tuesday August 9 2011



Very big things are happening in the geothermal energy sector. Mega-projects and multi-million dollar contracts are in different stages of being rolled out.

The largest of them all is the Olkaria 4 Project where construction of a power plant with a capacity for producing in excess of 280 MW is about to start.

Its sheer size and complexity is such that it will disrupt the livelihoods of Maasai pastoralists living in the Olkaria area in major ways.

While perusing the numbers, I was surprised to learn that it is expected that a whopping $10 million will be spent on resettling the displaced.

This move has provided a perfect setting for patronage politics. The rural elite are already scrambling to play a role in the process of identifying the beneficiaries of the resettlement plan.

Which is why it is not surprising that though it will take long for the project to kick off, the political under-currents are already palpable.

Recent reports that National Heritage Minister William Ntimama had been ejected by local leaders from a public meeting in the Kedong area were but the opening salvos of a vicious political battle ahead.

I have digressed. The most sensational story in the geothermal sector is a project in which Norwegian investors are trying to introduce new technology for exploiting geothermal wells.

The highlights are as follows: The Norwegian company, Green Energy Group Inc, came here claiming that they were capable of installing for us a technology that would revolutionise the exploitation of geothermal power.

Here is a bit of background. In the past, geothermal power production has been expensive and time-consuming. You have to drill many wells first before thinking about mobilising money to build a power plant.

The Norwegians came with a solution they touted as capable of circumventing this long route. They said they had developed a miniature power house that can be mounted quickly on top of an already sunk well and start producing power immediately. They also claimed the technology they were offering was capable of generating between 5 and 10 MW.

Such was the hype around the technology that when the United Nation’s secretary-general Ban Ki-moon visited Kenya in April this year, he had to make time to visit Olkaria to witness the first generator installed.

Have the Norwegians delivered? That is an open-ended question. The long and short of it is that they made too many extravagant claims.

The biggest embarrassment was that the first plant delivered to Olkaria turned out to be faulty. Brand new turbines imported from India by the Norwegians have failed and are presently being re-machined and modified at a factory in Nairobi’s Industrial Area.

A second turbine has had to be transported to the Kenya Airway’s workshop in Nairobi for what engineers described as ‘balancing’.

Indian engineers who have been installing the wonder technology have been asked to leave the country.

I will stop the narrative there. But there is a lesson to be learnt. We, in Africa, will continue to rely on foreigners as agents of technology transfer.

What I don’t understand is why we don’t take time to verify the credentials of technology suppliers. Is it not an outrage that these Norwegians are just experimenting on us?

The truth is that the well-head generators they are trying on us have not been installed anywhere in the world. Yet we have contracted to pay the Norwegians billions of shillings.

Geothermal energy remains the only proven large-scale option of delivering cheap energy for power-hungry Kenya.

We must tell the Norwegians that we don’t have the time to waste on experiments. The consumer is thirsty for power.

The Chinese has sunk for us in excess of 50 wells that are lying idle. The state-owned Geothermal Development Corporation is also drilling wells at the Menengai fields. As a matter of fact, only last week, the GDC invited tenders for well-head generators.

The more we delay constructing the new technology, the more we shall allow the Aggrekkos of this world to continue strangling the power consumer.