- Jica has lent KenGen Sh40 billion for the Olkaria V project which involves putting up two geothermal power plants of 70MW each.
The Kenya Electricity Generating Company (KenGen) will mid this month start building a 140 megawatt steam power plant at Olkaria after securing funding from the Japanese government.
The Japan International Co-operation Agency, a State organisation, has lent the power generator ¥45.7 billion (Sh40 billion) for the Olkaria V project which involves putting up two geothermal power plants of 70MW each.
Electricity from the project is expected to be fed into the national grid at the end of 2018. KenGen’s managing director Albert Mugo said drilling has already been completed.
“We have procured funding from Japan. We will be breaking ground for this project any time now,” Mr Mugo said on the sidelines of KenGen’s annual general meeting held in Nairobi on Wednesday.
The first plant will be ready to begin generating electricity in 24 months while the second unit will be completed six months later, according to KenGen.
Part of the project will be financed using KenGen’s cash reserves, including proceeds from the recently concluded rights issue which raised Sh6.35 billion from minority shareholders.
The Treasury, which controls 70 per cent of KenGen, participated in the cash call by converting Sh20.15 billion of loans advanced to the power producer into equity.
Mr Mugo said the $555 million (Sh55.5 billion) Olkaria V is the only new project the State-owned power producer will build this fiscal year ending in June 2017.
Once completed, the additional geothermal power will grow KenGen’s current steam capacity of 533.8MW by a quarter. The power generating firm had an installed capacity of 1,630 MW as at June 30, 2016.
At the shareholders’ meeting Kenya Association of Manufacturers chief executive Phyllis Wakiaga was elected to the KenGen board. Ms Wakiaga, 35, is among the youngest female directors at the firm which is listed on the Nairobi bourse.
Millicent Omanga, 34, on Wednesday resigned from the KenGen board to vie for the Nairobi County woman representative post in the 2017 General Election.
KenGen is also racing to begin building an additional 70MW steam power plant at Olkaria I in the current financial year.
Three multilateral lenders, including European Investment Bank, JICA, and German Reconstruction Bank have agreed to fund the $314 million (Sh31.4 billion) project, Mr Mugo said.
“Tender documents are ready, but I highly doubt we’ll be ready,” Mr Mugo said in an interview.