CS Charles Keter and (CNPC) China National Petroleum Corporation Vice President, Zhao Zhengzhang signing the MOU amendment of the 350MW Geothermal steam production and power generation.
Kenya and China signed a Memorandum of Understanding to partner in the production of 350MW of geothermal power that will be generated in KenGen and GDC’s Menengai and Olkaria geothermal wells.
The amended MOU which was entered by the two countries in 2013 during President Uhuru Kenyatta’s State visit to China, is aimed at fast tracking the development and power generation of Geothermal in Kenya through various areas of partnership between both countries, but mainly through financing, joint resource development, management and power generation using proven, mature and environmental friendly technologies at reduced cost. ‘We have the steam and China has the resources’. Said Hon. Keter.
The CS, at the press conference noted that the financial facility has been changed from a loan to an investment so as to reduce the financial burden of repayment on the exchequer and with this, cases like Kipevu Power plant in Mombasa will switch to use of geothermal power in energy production instead of diesel.
Kenya Electricity Generating Company (KenGen) was the only implementing agency initially but with the amendment, Geothermal Development Company (GDC) which is 100% state-owned was brought on board to increase the fields that can be utilized and fast track the exploitation of the geothermal resources. Therefore, KenGen and GDC will be the implementing agencies while China National Petroleum Corporation (CNPC) will offer technical support and China’s Exim Bank will finance the project. A Non-Disclosure Agreement (NDA) was signed between the implementing agencies to ensure security and confidentiality of information.
The Government of Kenya has committed to encouraging investment in the geothermal subsector so as to achieve at least 1,900MW of geothermal electric power generation by 2017 and 5,00MW by 2030. Currently an estimated 630 megawatts of geothermal power has been injected into the national grid.
‘Kenya has huge potential in geothermal energy and our country is ready to provide required resources and expertise to tap it’. said Zhao Zhengzhang, CNPC Vice President.
Geothermal sources currently account for one-third of the national installed capacity estimated at 2 150 MW but provide more than half of the energy generated due to its high energy yield and stability against weather variations. Geothermal is poised to be the future dominant source of electricity.