Name and Location
Bogoria-Silali geothermal project phase 1, Kenya.

Project Description
The project proposes to build eight geothermal power plants, each with a capacity of 100 MW, at the Bogoria-Silali block, in Kenya’s Rift Valley.

Detailed surface studies at the Bogoria-Silali block, which consists of the Bogoria, Baringo, Arus, Korosi, Chepchuk, Paka and Silali prospects, have indicated that it has the potential to generate around 3 000 MW of geothermal electricity, using underground steam prevalent in the Rift Valley.

The country’s vast heat reserves under the Great Rift Valley can generate 7 000 MW, of which 5 000 MW is being targeted by 2030.

The current plan is to develop 2 000 MW within the Bogoria-Silali block in four phases, with the initial phase targeting 800 MW of power by 2017, and another 1 200 MW planned in three 400 MW phases ending in 2023.

Value
Potential investors must establish that they can raise at least $400-million for each 100 MW unit, supported by letters from credible financiers.

The current capital structure for each power plant proposes that at least 25% of the project costs be covered through equity and the balance through debt.

Duration
Phase 1 of the project is planned to be completed by 2017. A total of 200 wells will be drilled using eight rigs, starting in January 2012, to retrieve the underground steam.

Client
State-owned Geothermal Development Company (GDC).

Key Contracts and Suppliers
Kenya Power & Lighting Company (power offtaker).

Latest Developments
GDC has invited potential investors to submit their expressions of interest (EoIs) for the development of phase 1 of the Bogoria-Silali block geothermal projects. These investors will be responsible for design, construction, financing, operation and maintenance of the power units.

Subject to a positive feasibility study, GDC will require the selected investors to cofinance the steam development. Funds obtained from the investors will be treated as a loan to GDC and will be repaid from the steam sales revenue, subject to terms and conditions being agreed upon by the two parties.

With steam field development in progress, the selected investors will be required to install the wellhead generation units for initial power generation.

The deadline for investors to submit their EoIs is August 8, 2011, with the shortlisting of interested investors to be announced a month later, followed by a request for detailed proposals.

The selection of the preferred investor is expected in December 2011.

The contract will be awarded subject to the investor successfully negotiating a power purchase agreement with Kenya Power & Lighting Company, securing a generation licence from the Energy Regulatory Commission, concluding a steam supply agreement with GDC, obtaining the environmental- and social-impact assessment licences for power generation and finalising the necessary financing within one year subsequent to receipt of the contract.

On Budget and on Time?
Detailed surface studies have been completed, with the acquisition of regulatory licences already in progress. Infrastructural development will start from July 2011.

Contact Details for Project Information
GDC public relations and communications chief officer Erick Wamanji, tel +254 072 372 2242 or email ewamanji@gdc.co.ke; or manager Ruth Musembi, tel +254 071 772 2522 or email rmusembi@gdc.co.ke.