Kenya, like many other developing countries, lacks reliable and affordable electricity. Numerous brownouts, blackouts, and power surges as well as the high cost of oil and changing weather patterns has contributed to high electricity prices, resulting in short-term solutions that impede economic growth. The country has a total electricity installation of about 1530MW with 52.1% of hydro-electric, 32.5% of conventional thermal, 13.2% of geothermal, and 2.2% of wind and other sources. Demand for electricity in Kenya is approximately 1,191MW, and is expanding at 5% annually due to a growing population and increasing industrial activity. The peak load is expected to grow to about 2,500MW by 2015 and from 10,000MW to 15,000MW by 2030. To satisfy this demand, the projected installed capacity should increase gradually to 19,169MW by 2030.
Kenya is estimated to have a geothermal potential of between 7000MW to 10000MW, but current installed capacity is only 205MW. The government is therefore focused on increasing its geothermal mix to 5000MW by the year 2030. To achieve this goal, KenGen*, the leading parastatal electricity generator is calling for an Expression of Interest (EOI) for the development of a 560MW geothermal project pipeline to be carried out in phases of 140MW each through Public Private Partnerships (PPP). Kengen is seeking bidders interested in a Joint Venture Partnership (JVP) arrangement or an Energy Conversion Agreement (ECA) to complete this project.
Under an ECA, KenGen provides steam to the BOOT contractor with a tolling arrangement. Also, the BOOT contractor is responsible for operating and maintaining the plant. Through a JVP, the successful bidder will develop and own the project with KenGen. The winning company will also maintain a majority share for 10, 15, or 20 years depending on the BOOT contract. Bidders should specify clearly which options they are interested in and the number of years they are willing to commit to the contract. The main objective of the pre-qualification procedure in this EOI is to attract a strong BOOT project developer with a proven track record in geothermal/ thermal power projects. The company should have significant financial resources, and be able to facilitate technology and skills transfer to KenGen in all phases of the project. The applicants must have a proven track record in development or as equipment manufacturer or as EPC contractors in geothermal/thermal power plants and electricity generation facilities. The deadline for submissions of interest is Friday, November 2nd, 2012 at 2 p.m. (Kenyan time). A detailed EOI announcement is available on request.
*KenGen, a 70% government owned firm, generates 60% of Kenya’s installed capacity to the national grid and is listed on the Nairobi Stock Exchange (NSE). It utilizes various sources to generate electricity ranging from hydro, geothermal, thermal, and wind. Although currently it only has 157MW of geothermal within its mix, the company’s geothermal strategy is to develop 1300MW by 2018. KenGen recently broke ground on a 280MW capacity plant that is being built by a Japanese consortium, making it the single largest geothermal project in Africa. The project will be completed in 2014. To learn more about KenGen, please visit www.kengen.co.ke