The Geothermal Development Company (GDC) broke the loss making streak to post Sh1.6 billion net profit in the full year ending June 2015 after inking a deal to sell steam from its Olkaria wells to the government.
The State-owned firm generated its first revenue of Sh2.5 billion in the period under review being earnings from sale of underground steam to the Kenya Electricity Generating (KenGen) Co to produce geothermal power.
GDC sold steam equivalent to 320 megawatts, helping tilt Kenya’s energy mix in favour of geothermal power which is green and cheaper compared to thermal power.
“Affordable energy means better lifestyles for Kenyans and more profits for investors,” said Johnson Ole Nchoe, chief executive at GDC.
“The Olkaria steam revenue has not only reduced GDC’s dependency on exchequer support, but has also ensured that the company is in the right path towards financial independence,” said Ole Nchoe, who took office mid this year.
GDC made a loss of Sh115 million in the year to June 2014, when it did not have any revenue streams. Grants to the parastatal tripled to Sh1.5 billion last year compared to Sh578 million in June 2014.
President Uhuru Kenyatta is keen to exploit renewable energy sources such as geothermal, wind, biomass, and solar to lower the cost of electricity in Kenya.
At an average of ¢21.6 per kWh, Kenya’s electricity is one of the priciest in the world, compared to Ethiopia’s ¢4.7 per kilowatt hour, according to World Bank data.
GDC was formed in 2008 as a special purpose vehicle to accelerate the development of geothermal resources by bearing the risk of drilling steam wells and providing steam to power producers for electricity generation.