Kengen seeks private partners to Build new 140MW Power Plant

On Tuesday 5 November, 2019 Kengen invited International financiers to help them build a 140MW power plant. This is KenGen first-ever Public-Private Partnership (PPP). This call is looking to capture partners and investors for the construction of a power plant in Olkaria located in Nakuru County. This new project puts the company’s dream of cementing its place as a global and regional leader in renewable energy production more closer. The bidders should also committ to finance, design, construct, commission, and operate the new power plant as the project is set to be on a Build, Own, Operate, Transfer (BOOT) basis. Through a Steam Sale Agreement within the PPP, Kengen will provide steam for an agreed period of 25 years. This will be through pre-drilled wells which are estimated to produce enough steam with a 20% buffer. Furthermore, KenGen, has also signed a 25-year power purchase agreement with Kenya Power, consequently, the project will provide stable revenues to the investors. Pursuant to the Special Purpose Vehicle (SPV) clause under the PPP Act 2013. The Geothermal giant will also inject in a cash investment to own 25% of the project. Over the past years, Kengen has been financing its projects through government & commercial loans. However, this new way of financing will undoubtedly help in cutting costs for the power giant while also reducing its rate of borrowing. With this new project, Kengen is making it a step closer to Kenya’s vision 2030 blueprint of attaining a 100% renewable energy use. Kengen is currently the most significant power producer in Kenya, contributing to 80% of power in the country. Currently KenGen produces 2,712 MW of power surpassing the current peak demand of 1,882 MW with power access amounting to 75%. The PPP bid closes in December 2019.