The authorities in Kenya are opmistic about adding 5 000 MW of power to the national grid in four years, after a tender for the construction of a coal-powered plant generation drew significant interest.
Energy and Petroleum Cabinet Secretary Davis Chirchir says 62 local, regional and international companies submitted bids for the construction of the Lamu plant, a positive indication that private investors are willing to partner with the Kenya government on energy projects.
“The big interest shown by investors makes us optimistic that we will meet the target of the 5 000 MW programme,” he says. Currently, Kenya’s installed generation capacity stands at 1 665 MW.
The fact that the bidders can raise at least $1-billion, Chirchir adds, is an indication that private investments are critical to accelerating the implementation of energy projects to enable the country to meet demand, which is expanding at a rate of 8% a year.
“We are telling private investors to produce the business plans – we agree on the cost of power and we later buy all the power when the projects are complete,” he notes.
The Lamu plant will have capacity to generate 900 MW to 1 000 MW. It is among the priority projects that Kenya intends to build in an effort to generate 5 000 MW by 2017, after it became apparent that geothermal plants might take longer to come on stream owing to financial constraints.
The plant will be located on the Indian Ocean coastline, in Lamu county, and will be implemented under the independent power producer model.
The successful bidder will develop the power plant, based on either the ‘build, own and operate’ or ‘build, own, operate and transfer’ model, and sell the electricity to Kenya Power.
According to Chirchir, the government of Kenya will evaluate the bids and shortlist ten companies that will move to the next stage – the request for proposals – and plans to announce the winning bidder in January.