http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 14.01Change: 0.00
R/$ = 10.67Change: -0.04
Au 1287.51 $/ozChange: 0.01
Pt 1424.50 $/ozChange: -1.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Nov 23, 2012

KenGen pursuing PPP plan in bid to exploit geothermal opportunity

Back
Construction|Engineering|Nairobi|Africa|European Investment Bank|Geothermal Development Corporation|German Development Bank|Hyundai|Kenya Electricity Generating Company|PROJECT|Projects|Resources|Tsusho Corporation|Africa|Japan|Kenya|South Korea|USD|MW Plant|Electricity|Energy|Energy Conversion Agreements|Finance|Power Plants|Transfer Contractor|Drilling|Infrastructure|Power
Construction|Engineering||Africa|PROJECT|Projects|Resources||Africa|Kenya||||Energy||Drilling|Infrastructure|Power
construction|engineering|nairobi|africa-company|european-investment-bank|geothermal-development-corporation|german-development-bank|hyundai|kenya-electricity-generating-company|project|projects|resources|tsusho-corporation|africa|japan|kenya|south-korea|usd|mw-plant|electricity|energy|energy-conversion-agreements|finance|power-plants-industry-term|transfer-contractor|drilling|infrastructure|power
© Reuse this



Power utility Kenya Electricity Generating Company (KenGen) has decided to resort to public–private partnerships (PPPs) in implementing mega geothermal projects owing to the colossal financial resources required.

The company has realised that raising a staggering $4.5-billion to finance power plants to generate an estimated 1 200 MW in the Olkaria field would be a tall order.

“KenGen plans to develop up to 560 MW of geothermal power plants at the Olkaria field in phases of 140 MW each through PPPs,” the company says.

KenGen says the partnerships it is seeking will take the form of joint ventures (where the partner would be the majority shareholder) or energy conversion agreements (where KenGen would provide steam to a build, own, operate and transfer contractor).

In both arrangements, the successful companies that would be selected through a competitive tendering process would be required to design, finance, supply, construct and operate the power plant for 10 to 20 years.

To be considered, interested companies must have net assets of at least $300-million and must demonstrate that they have raised funding of at least $100-million for an infrastructure project. Further, they must have a minimum of five years’ experience in developing geothermal power plants.

The PPP route makes it easy for KenGen to build the power plants within a government-stipulated timeframe without exerting further pressure on its bottomline and without seeking Ministry of Finance-guaranteed loans from international financiers.

If it proceeds along this route, KenGen will join the State-owned Geothermal Development Corporation, which has been seeking equity investors to fund the development of 800 MW of generation capacity in the Menengai field.

KenGen, which generates about 80% of Kenya’s electricity, is already feeling the burden of a ballooning loan book after raising $900-million from international financiers including the World Bank, the German Development Bank (popularly known as KfW), the European Investment Bank, the French Development Finance Institution and the Japan International Cooperation Agency to construct the 280 MW plant.

The plant, being built by a consortium comprising Tsusho Corporation, of Japan, and Hyundai Engineering & Construction, of South Korea, has a price tag of $1.3-billion. The plant is expected to be commissioned in 2014.

Studies by the company show the greater Olkaria geothermal field, which is located 120 km from Nairobi, has potential to generate 1 200 MW, yet only 207 MW has been developed.

Since 2006, KenGen has drilled a total of 63 wells with a steam capacity equivalent to 442.7 MW. About 320 MW of the steam is being dedicated to the 280 MW plant and the company has put in place a detailed drilling programme for steam for the 560 MW plant.

Kenya, East Africa’s largest economy, has set itself a target of generating at least 5 000 MW of electricity from geothermal by 2030, in line with the Vision 2030 master plan, which aims to transform the country into a midlevel economy.

The country has identified more than 14 high-potential sites along the Rift Valley that can generate between 7 000 MW and 10 000 MW.

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Electricity News
Mining and energy solutions firm Cronimet Mining Power Solutions officially broke ground and began its engineering, procurement and construction (EPC) contracting activities for a large Namibian photovoltaic (PV) power plant on August 18. The PV project is located in...
To bolster its argument that renewable energy is critical to combating climate change, the World Wide Fund for Nature-South Africa (WWF-SA) has commissioned a series of reports that investigates the state of renewable energy in the country, focusing on how it can be...
In the last three years, gas generator-sets have risen in prominence in Europe and the US, owing to stricter emission laws and lower gas prices. The shale gas boom in the US and increasing adoption of biogas in Europe have kept the gas generator-sets market in the...
Article contains comments
More
 
 
Latest News
The pump prices of both grades of petrol and wholesale diesel, as well as the maximum retail prices of illuminating paraffin and liquefied petroleum gas (LPG), are set to decrease from September 3, the Department of Energy said on Friday. Petrol would drop by 67c/l,...
The amount owed to municipalities for services has continued to rise, reaching R94-billion by June, compared with the R93.3-billion recorded in December. Households still accounted for the bulk of the aggregate municipal consumer debts; however, this had declined...
More
 
 
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
 
 
 
 
 
This Week's Magazine
South African State-owned defence industrial group Denel has announced its fourth consecutive year of profits. The group's results for the financial year 2013/2014 were recently announced at its head office in Centurion, south of Pretoria. Revenues grew by 17%, net...
There is little opportunity for JSE-listed infrastructure company Group Five to grow shareholder value in the domestic market, says CEO Mike Upton. He says value can still be found in the private sector, in the renewable and industrial power sector, as well as in...
The National Association of Automobile Manufacturers of South Africa (Naamsa) has announced the event dates of the 2015 Johannesburg International Motor Show (JIMS). The event will take place from October 14 to October 25, 2015, at the Johannesburg Expo Centre, Nasrec.
UK engineering support services provider Babcock is set to deliver the largest order of global truck manufacturer DAF’s truck tractors in Southern Africa to bulk carrier road-based logistics company Ngululu Bulk Carriers (NBC), with 133 trucks to be delivered in...
Digital radio communications in the African local government space can open up the world, but have many challenges to overcome, notes integration and migration of legacy radio communications infrastructure with digital mobile radio company Emcom Wireless head of...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks