NAIROBI - Kenya Power has signed a deal to buy 140 MW of geothermal electricity from private producer AGIL for 25 years starting in 2018, Kenya Power said in a statement on Monday.
Demand for electricity from firms and homes outstrips Kenya's installed generation capacity, which frequently leads to blackouts that disrupt businesses and forces them to spend extra funds to install and run generators.
Under the terms of a power production agreement, Africa Geothermal International Kenya will build, operate and maintain the geothermal plant and the electricity produced will be bought by majority state-owned Kenya Power, the statement said.
The country has the potential to produce an estimated 7 000 MW of geothermal energy and is targeting output of at least 5 000 MW by 2030 to reduce an over-reliance on hydro generation.
Geothermal energy requires big investments upfront, mainly owing to expensive drilling of wells, but is seen as more reliable than hydrogeneration which is susceptible to drought.
KenGen, which generates the bulk of the country's power, is constructing a 280 MW geothermal power plant at Olkaria, in Nakuru county in Kenya's Rift Valley.