In Kenya, it has been confirmed that the procurement phase of the 140MW Olkaria V geothermal power plant project is complete and construction is expected to commence this year.
Without disclosing the selected applicants, Japan’s Deputy Ambassador, Mikio Mori, said: “Bids have been sent to three applicants who were successful in the request for proposal stage. We expect construction works on the power plant to start in five months,” Standard Digital reported.
According to media, before the construction process commences, three 14MW wells have been sunk for testing, with each well costing $7 million to drill.
Exploring energy alternatives
Mori highlighted: “Just like Japan, Kenya’s dependence on hydropower is not reliable due to climate change, which calls for the two countries to explore geothermal as the most dependable source.”
[quote]Geothermal accounts for 51% of the national power mix in Kenya, placing hydroelectric in second place accounting for 40%, which was the leading source of energy in early 2015. Other sources including thermal and wind account for the remaining 9%.
Mori said: “We expect the actual ground-breaking for the Olkaria V to be done before the upcoming Tokyo International Conference on African Development (Ticad vi) later in August, which will also give Kenya a chance to put forward its needs and aspirations in the energy sector for possible financing.”
Finance agreements in place
In March 2016, the Japan International Corporation Agency (JICA) signed a $394 million agreement with Treasury for Olkaria V, which allows for a 10-year grace period and a 30-year repayment period at an interest rate of 0.2%, Standard Digital reported.
“We decided to sign the agreement with the [National] Treasury to avoid bottlenecks associated with Parliament approvals that would have delayed the project as witnessed in Olkaria I-IV,” said JICA’s consultant Evanson Njenga.
According to Njenga, the Kenya Electricity Generating Company (Kengen) and National Treasury are still expected to sign a sub-agreement to finalise the construction process.