Economy

Centum turns to KenGen in fresh geothermal quest

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KenGen's geothermal plant in Olkaria. FILE PHOTO | NMG

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Summary

  • Centum-owned Geothermal Akiira has signed a geo-scientific contract with KenGen on exploration for geothermal resources near Olkaria.
  • Akiira will tap KenGen’s expertise to conduct geoscientific surveys to gather relevant data in planning for viable exploration of geothermal resources in Naivasha.
  • Centum and its partners announced earlier plans to resume exploration for geothermal steam in Naivasha after previous two wells yielded little resource.

Centum #ticker:ICDC-owned renewable energy company Akiira Geothermal has turned to Kenya Electricity Generating Company (KenGen) #ticker:KEGN for help in steam generation quest after the two wells it sank in Naivasha at Sh1.2 billion failed to meet production capacity.

Akiira has signed a geo-scientific contract with KenGen on exploration for geothermal resources near Olkaria.

Under the deal, Akiira will tap KenGen’s expertise to conduct geoscientific surveys to gather relevant data in planning for viable exploration of geothermal resources in Naivasha.

“We are conducting a geoscientific study with Akiira and we will have a preliminary report by March,” said Cyrus Karingithi, the assistant manager, resource development and infrastructure at the KenGen in an interview with Business Daily.

Centum and its partners announced earlier plans to resume exploration for geothermal steam in Naivasha after previous two wells yielded less resource than what is required to sustain electricity generation.

Akiira banks on the planned drilling to kick-start building of a 70-megawatt power plant whose cost is projected at €310 million (Sh36.04 billion).

The first two wells, whose drilling works started in 2015, encountered some steam which was, however, not enough to support power generation to be connected to the national grid. The power project is based in Akiira Valley in Naivasha and would have a capacity of 70 megawatts upon completion.

Centum Investments owns a 37.5 per cent equity stake in the Akiira consortium, with the remaining 62.5 per cent owned by American firms Ram Energy, Marine Power, and Danish company Frontier Markets.

This is the first phase of the development of a 140-megawatt geothermal plant.

Centum chief executive James Mworia said earlier: “We are in advanced discussions with strategic partners to do a joint development of the field and we expect to conclude that in the first quarter and to carry on with the drilling activities.”

“The field is rich in geothermal. It’s just next to KenGen’s Olkaria field. So, I have no doubt it’s going to be a successful operation. It’s just that it has taken us a long time,” he added.

Akiira, the Centum subsidiary signed a power purchase agreement with Kenya Power in August 2015.