Kenya plans to build a 140MW geothermal power plant under the public-private partnership (PPP) framework, the state-owned electricity firm said on Tuesday.
Kenya Electricity Generating Company (KenGen) said in a statement that the PPP project entails the development of a geothermal power generation plant on a Build, Own, Operate and Transfer (BOOT) basis.
“The successful bidder will enter into a joint venture with KenGen and will finance, construct, own and operate the power plant and the associated facilities and transfer the project back to KenGen at the end of the operational term,” the company said.
According to the firm, five companies have been shortlisted to set up the first phase of Olkaria VI 140 MW Power Plant in Naivasha which approximately 75kms northwest of Nairobi.
KenGen already produces 534 MW from geothermal power.
The company said that due to the heavy capital investment required to develop power projects, it found it necessary to have private investors take an active part in the development of its power projects to achieve fast capacity expansion program.
KenGen noted that besides the usage of private financing, PPP model ensures project cost overruns are not borne by government agencies, bring innovation and better use of appropriate technologies, and ensure better exploitation of assets.
In the past, the electricity generator has financed power projects through syndicated debt funding sourced primarily from multilateral and bilateral institutions, locally raised debt, equity and state-to-state concessionary funding. Enditem