KenGen Plc has announced that it has secured a contract to supply geothermal drilling services to the Ethiopian Electric Power.
According to a statement distributed by the power producer to newsrooms, it bid – with its partners from China – for the Horn of Africa project as a consortium and was awarded the contract in December 2018.
KenGen is supplying about 30 per cent of the component of Phase II, about $6.2 million.
“As we extend our services to Ethiopia, we are leveraging on our expertise,
Abraham Belay, EPP’s chief executive, witnessed the signing deal. He said: “Currently we have some geothermal drilling rigs that are idle and now broken down and therefore the need to purchase new ones. We will be delighted to have you build the capacity of our people to be able to manage the equipment and run the power plants even after you exit the sites.”
Ethiopia had tried to venture into geothermal development in efforts dating as far back as 1981 but was yet to make a commercial breakthrough.
The World Bank through a $76.8 million loan to the Ethiopian Government finances the contract -implementation of drilling rigs and accessories, and rig operation and maintenance for drilling geothermal wells at Aluto, Ethiopia.
The project will be implemented in two phases;
• Phase I – purchase of drilling rigs and
• Phase II – provision of drilling services
Kenya is Africa’s number one geothermal energy producer and among top 10 in the world. The country has a geothermal installed capacity of 685 MW with an estimated potential of 10,000MW along the Rift Valley. Currently this potential is being harnessed in Olkaria, Menegai and Eburru fields.
During the company’s last financial year, revenue generated from geothermal power plants increased to Ksh 17.1 billion in 2018 from Ksh16.1 billion in 2017, a 6 per cent growth.
The other consortium partner in the deal is the Shandong Kerui Group. Both wield extensive experience in manufacture and supply of geothermal development equipment.