Nairobi, Kenya — ESI-AFRICA.COM — 25 November 2011 – The government of Kenya plans to obtain half its electricity from geothermal sources by 2018, in its efforts to meet rising demand and to cushion the uncertainty of hydro-power.
With this in mind, the government has been wooing investors during the geothermal conference held here over the past week, reports the “Daily Nation.”
“We want to shift into alternative sources of power that will provide cheaper electricity. Geothermal energy has high initial investment but provides cheaper electricity in the long-run,” said KenGen managing director, Eddy Njoroge.
He added that the company would need to raise at least US$4.5 billion to generate 1,200MW from geothermal wells in Olkaria and Menengai. Kenya has an estimated potential of between 7,000MW and 10,000MW of geothermal energy, but only 200MW is currently being exploited.
The country’s power demand has been growing at 8%pa, leaving a small reserve margin of about 5% that is wiped out when there is drought.
Local and international private investors are expected to speed up exploitation of geothermal energy to achieve the 17,000MW target set for 2030, the newspaper adds.
Njoroge said all options to raise investment will be explored. “We need 4,000MW from geothermal by 2030. We are looking at various options for financing this project,” he added.
Energy minister Kiraitu Murungi said several investors had shown interest and agreements with companies from China, Korea and Japan had been signed to start the fourth phase of Olkaria geothermal power in 2013.
He invited more foreign investors to help the country exploit the country’s energy potential “’ but some investors have been demanding sovereign guarantees before they invest in energy projects.