Kenya Nails Down Japanese Loans For Geothermal Expansion

Features

 Kenya plans to generate at least

500 MW of geothermal energy by 2030.

Shown is a hot spring in Kenya’s Lake Bogoria national park. The Japanese government will lend 29.516 billion Japanese yen ($316 million) for the expansion of Kenya’s Olkaria I geothermal power plant.

Olkaria I, the first geothermal power plant in Africa, has been operating at 45 megawatts of total power capacity through its three generation units. The Japanese funding will be used to build the plant’s fourth and fifth power generation units. The expansion will add 95 MW to the capacity of Olkaria I.

The loan, given under flexible terms, will enable Kenya to maximize its geothermal power potential to alleviate its current power crisis. The Kenya Broadcasting Corporation said the country plans to generate at least 500 MW of geothermal energy by 2030.

Shiegeo Iwatani, Japan’s ambassador to Kenya, said that the project is intended to help the country foster a favorable condition for investment and development.

Kenya Electric Generating Company is also reportedly building the 35-MW Olkaria II geothermal plant expansion in the Rift Valley. The electric company also plans to construct another geothermal station, Olkaria IV.

Unstable and high fuel prices, overdependency on hydropower production and the necessity to diversify the country’s energy resources prompted the Kenyan government to sign the loan agreements with Japan, said Uhuru Kenyatta, Kenya’s deputy prime minister and minister for finance.

Mr. Uhuru said Japan and Kenya have signed four similar agreements to develop infrastructure, health and environmental projects in the country worth approximately 1.454 Kenyan shillings ($18 million).

In June 2009, Kenyan Prime Minister Raila Odinga created a national task force to accelerate the development of green energy in the country. Ideas on reducing energy costs and installing 2,000 MW of additional power generation by June 2012 were discussed.

The program aims to build geothermal, wind, solar and biofuel projects in the country. The task force was also mandated to come up with incentives to encourage energy plants to produce energy saving bulbs and other energy efficient devices.

Kenya’s diverse renewable energy sources include hydroelectric power, particularly on Tana River, biomass from agricultural by-products, wind energy from the Kano plains and solar energy mainly located at the northern side of the country. Experts reportedly see the coastal area as a potential spot for wind energy projects.

Kenya Electric (NBO:KGEN) also operates a hydropower station on the Turkwel River, which runs along the border of Kenya and Uganda.