Page 5 - AfrElec Week 25

AfrElec COMMENTARY AfrElec
in under four months.
KenGen is to drill wells and carry out geosci-
enti c surveys for independent power producer (IPP) Tulu Moye. KenGen will drill eight geo- thermal wells at a cost of $6.5mn per well.
In February, KenGen secured a deal valued at $76mn with Ethiopian Electric Power (EEP) for rig operations, drilling, and maintenance of geothermal wells.
Other geothermal expansion options for KenGen include Rwanda and Djibouti.
Earlier in the year, KenGen won a $76.8mn geothermal drilling services contract from Ethi- opian Electric Power (EEP).
KenGen won the two-phase contract, nanced by the World Bank, in partnership with China’s Kerui Group Co., Ltd as it aims to market its expertise in the promising Ethiopian energy sector.
e deal is KenGen’s largest foreign project. It aims to supply geothermal drilling rigs and accessories and then drill eights wells initially at the site at Aluto Langano in southern Ethiopia, and could built another 12 a later date.
KenGen has also done similar work in Comoros, Rwanda, Uganda, Tanzania, Djibouti and Sudan.
Ethiopia faces annual growth of up to 32% in power demand, and aims to have 2,000MW of new geothermal capacity by 2030, accounting for 8% of the country’s forecast 25,192MW by that time.
“We have over the period developed a very solid experience in human capital especially in geothermal and we have been seeking oppor- tunities to export our expertise,” said KenGen business development director Moses Wekesa.
Wider strategy
As well as reforms, access to nance, both from development finance institutions (DFI) and more commercial backers, is key.
“Kenya was among the first countries in Africa to liberalise generation and it has its own advantages. You have many players and it brings competition... you have adequate power,” Ken- Gen’s Miano said in February.
In terms of raising nance, the company is con dent that issuing green bonds will bring in the nance needed.
In February, Miano said the company planned to issue what would be the company’s rst green bond later in 2019 to raise funds for expansion.
She said this would take place once the com- pany had redeemed a previous 10-year, KES25bn ($250m) bond in October.
is earlier bond was heavily oversubscribed when issued in 2009, highlighting strong interest in Kenya’s power sector and the then reshaped, liberalised KenGen.
Private investors today hold 30% of the com- pany, while the rest is held by the state, as part of an earlier industry restructuring and moderni- sation exercise.
Looking ahead
In the longer term, the government’s Kenya Vision 2030 development blueprint calls for 5,000MW of geothermal capacity by 2030.
Boasting a total installed capacity of 2,370MW, Kenya is seeking to add more renew- able energy to its energy mix to ensure a sustain- able supply of electricity.
e government estimates demand for elec- tricity will grow at 9% a year until 2021 and then ease back to 7%, meaning that KenGen must add new capacity every year merely to keep pace with demand.
The company is relying on continued reforms, new sources of nance and a reputa- tion for geothermal expertise to drive forward its business and maintain its reputation for meeting Kenyan demand.™
The government’s Kenya Vision 2030 development blueprint calls for 5,000MW of geothermal capacity by 2030
Week 25 26•June•2019 w w w . N E W S B A S E . c o m
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