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GDC seeks Sh193bn for mega power projects

Geothermal production at Ol Karia in Naivasha
Geothermal production at Ol Karia in Naivasha. FILE PHOTO | NMG  

The Geothermal Development Company (GDC) requires Sh193 billion to complete two mega power projects in Menengai, Nakuru County and Lake Baringo-Silale, legislators heard yesterday.

The two projects stated in 2010 with Menengai projected to be complete in 2027 and Baringo-Silale in 2028.

Johnson ole Nchoe, the GDC managing director, told the National Assembly’s committee on Energy that the government targets to develop 460 megawatts of geothermal power in Menengai at an estimated cost of Sh115 billion.

Of the total Menengai project cost, the government is expected to pump in Sh90.8 billion while Sh25 billion will come from development partners.

“So far, Sh41 billion under the government of Kenya budget and Sh69.9 billion under foreign funding has been spent on the Menengai project. A balance of Sh48 billion from the government and Sh4.9 billion from development partners is yet to be spent.

This brings the total amount not spent to Sh53 billion,” Mr ole Nchoe told the committee chaired by Nakuru Town East MP David Gikaria.

The 300 megawatt Lake Baringo-Silale project will be developed at a cost of Sh98 billion.

Mr Ole Nchoe said the government will pump in Sh46 million while development partners have committed to provide Sh31 million.

He said so far, the government has spent Sh1.4 billion while Sh2.9 billion from foreign donors has been utilised to construct infrastructure and water systems. “A total of Sh4.4 billion has been utilised on infrastructure activities, putting up a road network and water supply systems…All contractors and materials are on site. We are constructing roads to access drilling areas. We will start to drill as soon as we mobilise drilling rigs that are in Menengai to the North Rift,” the MD said.

Mr Ole Nchoe said development of Menengai and Silale projects will bring down the cost of electricity to $0.7 cents down from the current $18 cents. “This is vision 2030 projects that are geared towardslowering the cost of electricity hence spurring socio-economic development,” Mr Ole Nchoe said.

He said the GDC is currently earning revenue of Sh3 billion annually from its Olkaria geothermal wells.

The energy parastatal has pending bills worth Sh1.39 billion as at end of June 2018, he told MPs. He said the cost of developing a geothermal well in Kenya is about Sh300 million to Sh350 million compared to international costs that range between Sh500 million to Sh650 million per well.

Mr Ole Nchoe said the budget cut by 20 per cent through the Supplementary budget II had occasioned delay in completion of two of the eight wells that the company set to construct in the year under review.

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