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Japanese firms control Kenya geothermal market

The country is currently ranked the ninth largest producer of geothermal electricity. FILE PHOTO | NMG
The country is currently ranked the ninth largest producer of geothermal electricity. FILE PHOTO | NMG 

Japanese firms have emerged as top builders of Kenya’s geothermal power plants and suppliers of heavy duty equipment such as steam turbines, tapping into the country’s shift to green energy.

The bulk of Kenya’s geothermal plants have been constructed by companies from the Far East nation, including global conglomerates Mitsubishi, Toyota Tsusho and Toshiba.

Power producer KenGen #ticker:KEGN recently contracted a consortium comprising Mitsubishi to construct a 158-megawatt Olkaria V steam power plant in Naivasha.  It will be completed mid-next year.

The firm will also supply turbines that convert steam to mechanical energy and passed through generators to produce electricity.

A turbine is the single most expensive equipment in the construction of a steam power plant and is made of hardened steel alloys to withstand thermal stress for up to 30 years.

“On average a geothermal power plant costs between $2.2 million (Sh222 million) to $2.5 million (Sh252 million) per megawatt,” said KenGen business development director, Moses Wekesa.

This means the 158-megawatt Olkaria V power plant will cost a minimum of Sh35 billion. The project is funded by loans from the Japan International Cooperation Agency (JICA). The funding by JICA gives Japanese firms an advantage in the bidding process which is restricted to firms from the country.

As Chinese companies dominate financing and construction of Kenya’s highways, railways and skyscrapers, Japan seems to be focusing more on energy development.

Toyota Tsusho, along with Korean firm Hyundai, constructed the 280-megawatt geothermal power plants in Olkaria belonging to KenGen, which was added to the national grid in the second half of 2014.

The turbines and generators were supplied by Toshiba.

Kenya has in recent years switched focus to geothermal energy, which is unaffected by weather unlike hydropower, and is three times cheaper compared to thermal power.

The country is currently ranked the ninth largest producer of geothermal electricity in the world and the leader in Africa with a capacity of 630 megawatts, according to Renewables Global Status report 2017.

Japan is ranked 10th with a geothermal output of 500 megawatts, behind Kenya.

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