Toyota signals appetite for Kenya's geothermal tenders

Toyota Tsusho Corporation is gunning for a share of the tenders due to be floated by the government of Kenya in the geothermal energy sector.

The Japanese conglomerate known for its automobiles, Sunday said it wanted to invest billions of dollars in Kenya’s energy sector after it successfully build the 280-megawatt Olkaria plants.

The announcement followed Friday’s meeting between President Kenyatta and Japanese Prime Minister Shinzo Abe at the Prime Minister’s official residence in Tokyo.

President Kenyatta is banking on foreign money to unlock potential in otherwise capital intensive projects like geothermal, and transport, in what has seen him make major deals especially with the chinese.

"At a meeting in Tokyo with President Uhuru Kenyatta, who is on a five-day official visit, senior Toyota Tsusho executives said they had set their eyes on a number of geothermal projects the government is due to put to tender in the coming weeks," the Presidential Strategic Communication Unit said on Sunday in a press statement.

The projects include a unit of Olkaria I and V, and Olkaria VI. Other fields of interest included Menengai, Akiira, Longonot, Baringo-Silali and Suswa power projects, Toyota Tsusho CEO Jun Karube told the President.

Kenya currently has an installed capacity of 2,300MW and plans to raise it to 5000MW by 2017 to cut the cost of power.

Kenya's major infrastructure projects some of which span national borders have raised interest from foreign financiers but continue to be dominated by chinese companies some of which have become subjects of major corruption investigations.

Toyota Tsusho won the first 280MW tender that had also attracted bids from several companies including, TransCentury (Kenya), Daewoo International (South Korea), Copperbelt Energy Consortium (Zambia), and Sumitomo (Japan).

Kansai Electric Power (Kepco), Mitsubishi Corp., Toyota Tsusho and Mitsui (all Japan) join Sithe Global Consortium (U.S.), Zorlu (Turkey) and the pan-African Consortium of Africa Finance Corp.

Tata Power (India), Ormat (Israel), Marubeni (Japan), Sjitz (Japan) and South African subsidiary of International Power (India).

Toyota Tsusho, which carried out a feasibility study on the building of an oil pipeline from Lamu port through to Kampala and Kigali, also expressed interest in bidding for the project itself when it became available.

The firm is also in the final stages with the county government of Mombasa to set up a Sh14.7 billion water desalinisation plant.

Toyota Tsusho was now awaiting a letter of intent, which usually offers the green-light for a project to proceed, from Mombasa before embarking on the $162 million project.

President Kenyatta welcomed Toyota Tsusho’s interest in the Kenyan and regional projects, but added that the interest would only be pursued within the framework of existing rules and procedures.

Cabinet Secretaries Amina Mohammed and Michael Kamau also attended the meeting. Toyota Kenya Chairman Dennis Awori was also present.