Kenya has improved its global ranking among the world’s largest geothermal powerhouses after it completed the testing of the first unit of the Olkaria V project.
The 82.7 megawatts from the project pushed Kenya above Iceland to position eight in the global rankings as the country continues its advancement towards green energy.
The power plant also helped Kenya Electricity Generating Company, KenGen, post a 98 percent increase on its profit after tax to hit Sh8.17 billion for the first half of the 2019/2020 financial year ending December 2019. KenGen also realized a 127 percent growth in other income, from Sh211 million in 2018 to Sh479 million for the six months ended December 31st, 2019.
The company’s Managing Director and CEO Rebecca Miano attributed the growth to the roll-out of the company’s business diversification strategy, which has seen the company clinch two drilling contracts in Ethiopia.
Analysts at Genghis Capital expect KenGen to have a buoyant financial performance this year, pegged on the geothermal capacity increase, additional contractual revenue streams and the large tax credit.
State-owned Kenya Electricity Generating Company (KenGen) is targeting flower firms and large industries in the proposed Naivasha Industrial Park as first customers for direct electricity sales. Listed electricity distributor Kenya Power currently has a monopoly on power sales but the Energy Act 2019 provides for the opening up of the sector.
Trade CS Peter Munya on Tuesday said support given by government has created an enabling environment in turn attracting a number of local and international private investors.
“As our Government believes in public-private partnership we are working hand-in-hand to realise the goals of the Manufacturing pillar of the Big 4 Agenda,” he said.
In August last year, Kenya Electricity Generating Company PLC (KenGen) clinched Sh5.8 billion contract to drill 12 geothermal wells in Ethiopia. The deal with independent power producer Tulu Moye Geothermal Operations (TMGO) PLC also included installing a water supply system and equipment.
KenGen, as per the contract, will supply drilling materials and provide operation and maintenance services for both the drilling equipment and the water supply system. KenGen Managing and CEO, Rebecca Miano, said this is the second and the company’s largest consultancy outside Kenya.
In February this year, KenGen won a contract to drill geothermal wells for the Ethiopian Electric Power (EEP) in Aluto. The contract entails implementation of drilling rigs and accessories as well as rig operation and maintenance for drilling geothermal wells.
It is financed by the World Bank through a $76,8 million (Sh7.8 billion)loan to the Ethiopian government. Phase I comprises the purchase of drilling rigs while Phase II entails the provision of drilling services. KenGen is supplying about 30 per cent of the components of Phase II which translates into about $6.2 million (Sh620 million).
”We are excited our efforts bore fruit. Being fully aware of the task ahead of us, we have rolled our sleeves and are now all set and ready,” Miano said.
During the company’s last financial year, revenue generated from geothermal power plants increased from Sh16.1 billion in 2017 to Sh17.1 billion in 2018, which was a growth of six per cent.
KenGen On Health
In 2018, President Uhuru Kenyatta directed the management of KenGen to set aside Sh300m for modernizing Naivasha Subcounty Hospital.
The President noted that this was the only public hospital servingfamilies working in KenGen and Naivasha town and thus the need to equip and expand it. Kenyatta made the remarks following a request by Nakuru leaders when he officiated the ground breaking ceremony of the Olkaria 1 unit 6 geothermal power plant in Naivasha. He also directed Kengen to facilitate several infrastructure projects in the side near the lake.
