OrPower 4, an American energy firm, has received 18.5 billion shillings ($220 million) for the development of a 100 megawatt (MW) geothermal power plant in Kenya; with the aim of offering reliable and cost-effective power.

The fund, which was received over the weekend through  Orpower 4’s parent company, Ormat Technologies,  was the first installation of a 26.06  billion shillings ($310 million) loan from a US government agency – Overseas Private Investment Corporation (OPIC).

According to Kenya’s BusinessDaily, the company said: “The remaining amount of up to $45 million (3.78 billion shillings) of tranche II of the OPIC loan is expected to be drawn over time prior to the commercial operation” of the expansion of the Olkaria III geothermal plant in mid next year.

Based on reports, OrPower 4 could borrow another $45 million (3.78 billion shillings) if the company decides to expand construction to an extra 16MW.

“The OPIC support for these projects enables us to obtain long term cost-effective project financing, improve their economics, and strengthen our balance sheet,”  Ormat’s CEO, Dita Bronicki said.

Kenya’s stated-owned power corporation, Kenya Electricity Generating Company (KenGen) has said that at the Olkaria station, it plans to develop the geothermal plants in four phases of 140MW each, under a joint operation contract requiring selected bidders to construct and later transfer ownership of the facilities back to KenGen after a decade or two.
The Search For Alternative Energy

On the back of an improving economy, Kenya’s electricity demand has risen to about 1,200MW, compared with 780MW in 2002.
Of this, KenGen produces 1,141MW with independent power producers generating the remaining.

The Olkaria III geothermal plant project embarked upon by the Kenyan government is aimed at reducing overdependence on unreliable rain-fed hydroelectric and thermal power.

The geothermal alternative is more reliable than both hydro and thermal power which are prone to unfavourable weather conditions and high international fuel prices, although drilling for the energy source could be expensive.

Kenya’s Energy ministry has disclosed that up to 7,000MW could be generated from geothermal sources.

The government has set a 5,000MW power generation target from geothermal sources, by 2030.

Apart from geothermal, the country is also looking to wind and coal power to boost energy reserves.

Energy ministry statistics reveal that as at December 2011, installed wind energy capacity to national grid was 5.45MW and a further 20MW is expected to be commissioned by the end of 2012.

Another 300MW Lake Turkana wind power project is planned for 2014.


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