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Economy

Baringo land deal paves the way for 3,000MW geothermal generation

Johnson ole Nchoe, the Geothermal Development Company CEO. PHOTO | SULEIMAN MBATIAH
Johnson ole Nchoe, the Geothermal Development Company CEO. PHOTO | SULEIMAN MBATIAH 

Baringo County residents have granted the Geothermal Development Company (GDC) access to their land, removing a major hurdle that has held back efforts to generate 3,000 megawatts of steam-powered energy in the region.

The affected residents have signed a land use pact with the GDC, paving the way for the commencement of the first phase of the Baringo-Silali project which seeks to generate 800 megawatts in January.

“I am happy to report that GDC has signed a land agreement with affected communities,” GDC’s chief executive Johnson ole Nchoe said last week after a closed-door meeting with KfW country director Klaus Liebig.

Land rows have previously ruffled executives of KfW, a German government-owned development bank, which has committed to pump Sh9.2 billion on the first phase of the project where 200 MW will be produced.

“The land pact paves way for completion of a legal opinion to KfW, and the subsequent disbursement of funds for the project,” said Mr Nchoe.  He added: “Having reached an agreement with land owners, we are moving closer to breaking ground.”

Delay to strike a compensation deal with Baringo residents has significantly slowed down a project that has been on the card from 2008.

Kenya has stepped production of geothermal power to cut reliance on expensive diesel powered generators and weather dependent hydro power. Since August 2014, Kenya has injected about 320MW of geothermal.  

Exploration drilling

The first phase of the Baringo project that straddles Bogoria, Paka, Chepchuk, Korosi and Silali areas will cost about Sh310 billion ($3.1 billion) and inject  200MW to the national grid.

In all, the GDC hopes to develop the first 2,000 MW in four phases beginning with 800MW by 2017, 400 MW by 2019, another 400 MW by 2021 and the rest of 400 MW by 2023.

The project to be completed under the public-private partnership model targets to supply power to Kenya, Uganda, Rwanda, Burundi and South Sudan.

The GDC had previously advertised for equity investors to jointly develop the Baringo steam field.

The KfW’s role in the project is to finance exploration drilling, one of the riskiest phases of geothermal development which – if successful - unlocks further financing.

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