Kenya: Private Investors to Add 80 Megawatts To National Grid

Transformer serving this blogger in Migori County, Kenya

The World Bank and private investors are set to add 80 megawatts to the national grid in 12 months through Gulf Power Ltd’s thermal plant in Mombasa Road, near Athi River.

Gulf Power has brought local investors from Gulf Energy Ltd and Noora Power Ltd in the Sh9.12b project which includes Sh2.7b in equity investments and Sh6.4b long-term debt financing.

WB gave the project a major boost through Sh4b loan which will be repaid for more than 15 years.

Already Gulf has signed a power purchase agreement with Kenya Power and Lighting Company (KPLC) for electricity it will generate. The agreement was also signed by the government, WB and JP Morgan Chase Bank N.A. of London.

“The WB has now signed partial risk guarantees for a third private power producer to increase the availability of electricity and diversify country’s power,” Johannes Zutt, World Bank Country Director for Kenya said.

The move will increase stability of supply of electricity to help businesses grow and create jobs for citizens.

The Gulf Power loan approved in February last year is among WB’s loan with other projects benefiting being Thika Power and Triumph Power Generation which were finished on August and December 2012 respectively.

“The loan supports innovative public-private partnership program that helps African countries to unlock their energy potential and improve competitiveness,” Lucio Monari, World Bank Sector Manager for Energy in the Africa Region explained.

The government plans to increase private sector participation and utilize low carbon resources such as wind and geothermal to increase electricity generation capacity by an additional 2,000Mw.

Manuel Odeny © 2013

Business: AfDB to replicate Menengai success in Africa

The African Development Bank (AfDB) is set to replicate the success of Menengai geothermal project across Africa.

The bank in a press statement called the 400 MW project ambitious and said will work on a series of smaller projects across the East African Rift Valley adapted to specific content of each country and geothermal potential.

In Djibouti the bank will development a 50 MW power plant in the Lac Assal region while in Ethiopia and Tanzania the bank is defining a geothermal development roadmap under Climate Investment Funds.

The same project will also be carried out in Comoros for a 20 MW geothermal plant to match the needs of the archipelago.

This was revealed during the 2012 African Rift Geothermal Conference held in Nairobi to help the bank premier its development in geothermal energy sector. The conference was attended by more than 630 delegates and 25 exhibitors.

“An eloquent illustration of this new model is the Menengai geothermal development project in Kenya, which the African Development Bank has recently supported with approximately USD 150 million highly concessional financing from its own resources blended with climate investment funds,” said Thierno Bah, AfDB Senior Power Engineer.

The Menengai Project once completed will increase energy supply to 500,000 Kenyan households, 300,000 small businesses and some 1,000 GWh for other businesses and industries.

The project will also displace around two million tons of carbon dioxide per annum, hence significantly contributing to the fight against climate change.

“Building on Kenyan success AfDB is focusing on developing the geothermal potential in Tanzania which has been identified as the next country having an important geothermal potential,” the bank said.

Tonia Kandiero, AfDB Resident Representative in Tanzania called the project ambitious to untapped the large geothermal resource potential in the Eastern Africa region from the current 217 MW, mostly in Kenya to estimated 10,000 MW which can be found in Kenya.

The project will be financed  for the early stage and high-risk activities mainly related to drilling activities to be undertaken by a special purpose company like the Kenyan Geothermal Development Company (GDC).

© Manuel Odeny, 2013

AfDB approves Sh29.4 billion for Kenya-Ethiopia electricity project

By Manuel Odeny

September 23, 2012

The African Development Bank (AfDB) has approved a Sh29.4 billion funding for the electricity highway project to Kenya from Ethiopia’s Gibe III dam project last week on Thursday.

The funding comes barely two months after the World Bank approved a Sh58billion loan that Ethiopia and Kenya needed to build a 20,000-kilometer high-voltage power line between the two countries.

The project seeks to increase supply of electricity in East Africa region which has seen demand rising steadily due to increased population that has caused severe power shortages.

“In Kenya… the additional power injected into the national grid will enable the supply of electricity to an additional 870,000 households by 2018, and a cumulative total of 1.4 million additional households by 2022, of which 18 per cent will be located in rural areas,” AfDB said in a press statement after its board approved the funding.

In the statement the bank also says businesses and industries will also benefit, with around 3,100 GWh of additional energy by 2018, increasing to around 5,100 GWh by 2022.

 “The project is intended to promote power trade and regional integration, contribute to the Eastern Africa Power Pool (EAPP) countries’ social and economic development, and reduce poverty in those countries,” the bank said

Apart from the two banks other co-founders of the Sh106.5 electricity highway includes which is set for commissioning in November 2017 include the French Development Agency (AFD) and the Governments of Kenya and Ethiopia.

Once finished the project will involve construction of a 1,068 kilometre high-voltage direct current 500 kV transmission line between the two countries and putting up of associated converter stations at Wolayta-Sodo in Ethiopia and Suswa in Kenya.

The line will be able to transmit a power capacity of up to 2,000 MW.

 “We have mobilized funds from other development partners in a timely and efficient manner. The project… has the potential to replace some fossil-fuelled thermal generation in the East African region,” Gabriel Negatu, AfDB’s Regional Director in charge of East Africa said.

It’s estimated that once finished the project will position Ethiopia as the main powerhouse and Kenya as the main hub for power trade in the East African region, Southern Africa, Egypt and Sudan.

 “The East African region is blessed with abundant hydropower and geothermal energy resources which with the implementation of this flagship project will establish pooling of energy resources at the regional level to create a regional electricity market through power trading,” said Thierno Bah, AfDB’s Senior Power Engineer.

The project have received a go ahead even after human rights and environmental activists said the Gibe III damn has been controversial by forceful evictions of locals and its effect on flora and fauna in the River Omo.

AfDB Regional Director Visits Menengai Geothermal Project

A geothermal well at the Menengai Crater

Mr. Gabriel Negatu, AfDB’s Regional Director in charge of the East African Regional Centre (EARC), paid an official visit to the Bank-funded Menengai geothermal site in Kenya’s Rift Valley last Friday. The 400 MW project will cost approximately US $488 million, with the AfDB providing US $120 million, and is expected to increase the country’s installed capacity by almost 30 per cent.

The geothermal project is an integral part of Kenya’s Vision 2030, under which the government has set for itself the goal of becoming energy self-sufficient to drive the increasing needs of the fast-growing economy. Kenya’s Rift Valley region is especially rich in geothermal resources and the government has placed special emphasis on tapping this natural and environmentally friendly resource through the establishment of the Geothermal Development Company (GDC).

Mr. Negatu was guided through the Menengai project by GDC Managing Director and Chief Executive Officer Dr. Silas Simiyu, alongside representatives from both institutions.

During the tour, Mr. Negatu expressed his satisfaction with the pace of implementation of the first phase of the project, which was officially launched by Kenyan President Mwai Kibaki earlier this year.

The Menengai Geothermal Development Project is situated within the eastern sector of the African Rift system, about 180 km northwest of Nairobi. The project aims to develop the Menengai geothermal steam field to produce enough steam for a 400 MW power plant that will be operated by the private sector as an Independent Power Producer (IPP) or through a Public Private Partnership (PPP).

The project will enable a substantial increase in the provision of additional reliable, clean and affordable power generation capacity to Kenyan households, businesses and industries, with an increase equivalent to 26 per cent of the current total installed generation capacity in the country. The steam field development will produce electricity generation equivalent to the consumption needs of up nearly 500,000 households, of which 70,000 are in rural areas, and 300,000 small businesses, as well as providing 1,000 GWh of energy to businesses and industries. The project will also reduce CO2 emissions by close to 2 million tons per annum.

Access to clean energy is expected to significantly improve health and education opportunities, particularly for women and girls in the area. The project will also ensure an employment ratio of 30 per cent women, which is considerably higher than the standards of small towns in the region. The transfer of the potable water facility to the community/municipality will positively impact and empower women who normally collect water for domestic purposes