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KenGen clinches Ksh 709 million deal to drill geothermal wells in Djibouti

Kenya Electricity Generating Company ( KenGen ) PLC has clinched a deal to drill three geothermal wells in Djibouti.

The company today signed a Ksh 709,822, 630 (USD 6,452,933) contract with Office Djiboutien De Development De lenergie Geothermique (Djiboutian Office of Geothermal Energy Development) (ODDEG).

The ceremony, in Galla Le Koma, Djibouti, was attended by Kenya’s Energy Cabinet Secretary, Hon. Charles Keter, and KenGen Managing Director & CEO, Mrs. Rebecca Miano.

Speaking during the event, Hon. Keter pointed out that African nations shared the common aspiration of delivering electricity to their people, which, he said, provided an opportunity to work together to meet the continent’s energy needs. “The biggest challenge has remained access (to electricity) in remote areas, and in Sub-Saharan Africa with 573 million people not having access to this important commodity. Although energy access policies have continued to bear fruit, with 2019 data showing tremendous progress, we have seen the Coronavirus pandemic reverse the gains. We can only remain optimistic that things will change in 2021,” the CS said.

While highlighting Kenya’s progress in achieving universal electricity access, he indicated that the country’s National Electrification Strategy (KNES) launched in 2018 had played an important role in helping the nation achieve electrification in an economically viable manner.

In 2019, Kenya’s power installed capacity was 2,818.9 MW. Currently, the country’s energy mix comprises geothermal (29%), hydro (29%), wind (12%), solar and others (2%) and thermal (28%).

The CS said the country had made remarkable progress in increasing access to electric power as a result of deliberate government efforts and private sector investment.

Kenya’s journey towards harnessing geothermal energy, he added, started in the 1950s and assured Djibouti of support in enabling it to realise its geothermal potential. “To date, we have drilled more than 300 wells within the Olkaria field, which is the bedrock of Kenya’s geothermal energy production. As a country, we have a geothermal energy potential of 10,000MW along the Rift Valley with the resource being harnessed in 23 sites,” he said.

For her part, Mrs. Miano expressed optimism that the three wells will be productive and enhance Djibouti’s efforts towards growing its energy production.

KenGen, which has embarked on a diversification strategy, leverages its expertise in geothermal energy by offering commercial drilling services, geothermal consulting and other energy-related services across Africa. Mrs. Miano said the company’s strategic plan is to harness opportunities geared towards driving growth beyond Kenya. “It is therefore our desire that in the next couple of years, we shall have considerable presence in countries within the Continent. It is also worth noting that we are not only keen on increasing our presence in Africa, but also enhancing energy capacities across the region,” she said.

This is the third geothermal drilling contract that KenGen has won in Africa. In October 2019, the company secured a Ksh 5.8 billion contract to drill 12 geothermal wells in Ethiopia. The contract with an independent power producer includes installing a water supply system and equipment.

In February 2019, KenGen won yet another contract for consultancy services and drilling geothermal wells. The contract is worth USD 76,801,344 (about Kshs 7.6 billion). It has also developed partnerships with countries such as Ethiopia and Rwanda in renewable energy development.

KenGen has invested in experts with considerable experience in geothermal exploration and drilling and will build the capacities of teams from Djibouti who will be working on the project.

Kenya is Africa’s number one geothermal energy producer and among the top 10 in the world.  KenGen has a geothermal installed capacity of 706 MW and is the leading geothermal power producer on the continent.

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