Top firm KenGen a trailblazer for Kenyan corporations

In the last quarter of 2019, it was made known to the public by KenGen of its diversification strategy in the regional neighbor country of Ethiopia. KenGen, which is Africa’s largest geothermal power generating firm,  won a tender to “export” its expertise and geothermal technical capacity into drilling geothermal rigs in Ethiopia.

Among many other, one of the reasons as to why state owned, KenGen, expanded into Ethiopia is that Kenya’s geothermal technical “local content” had gradually matured into international standards. The KenGen-Ethiopia deal is expected to earn foreign exchange for Kenya while providing external contracting exposure to its employees.

KenGen in Geothermal power generation

KenGen is an acknowledged instigator of geothermal power generation in Africa. In April 2020, Kenya ranked among the top 10 countries in the world exploiting geothermal power.

KenGen is the firm at the center stage of geothermal power production. Its drilling projects in Ethiopia after a competitive tendering process are proof that the company has made the mark, and that the firm can compete for similar contracts elsewhere in Africa, especially in countries that accommodate the Rift Valley and areas with volcanic geology.

Pursuant to SDG 7 and the Least Cost Power Development Plan, Kenya has prioritized geothermal generated power into its renewable energy power mix. It is expected that in the next 20 years, geothermal power will contribute 26% of the Kenya’s total electrical energy mix.

This is possible for Kenya as it has the abundance of geothermal resource and a ready technical capacity. Geothermal readily attracts project funding from global multilateral investment institutions and private equity, due mainly to its good ranking in carbon footprint hierarchy. As an “indigenous” energy resource it adds direct value to the economy. It is a preferred base-load electricity supply for stabilizing the grid during peak demand, and a back-up for the other seasonal and intermittent renewable energy sources ( hydro, wind and solar ) .

KenGen a trailblazer for Kenyan state corporations

KenGen is a trailblazer for Kenyan state corporations in that first of all it has contracted indigenous construction contractors who have nurtured their local content (technology, expertise and capacity ). Secondly, it is the first Kenyan state corporation to not only be able to undertake major local projects but to also step out and bid for contracts outside Kenya.

The power generation firm has stepped out of the norm rationale in Kenya whereby Chinese contractors are preferred to local content. Over reliance on Chinese technique over the last 15 years has weakened Kenya’s technical contracting capacity and consequently occasioning potential participation of Kenyan firms in regional construction contracts.

To ameliorate the foregoing, experts state that a high level of political attention and resolution such as amendments of the Public Procurement Act are necessary.

In conclusion, KenGen should serve as an effective example to Kenyan state corporations on how to nurture professional and technical skills for application in Kenya and outside. Geothermal drilling skills are indeed transferable to other related sectors like oil and gas exploration and development.