The 280 MW Olkaria geothermal power project by KenGen recently got a Sh7.4 billion boost from Germany's Development Bank KFW to fund consultancy services and part of the steam field drilling works.
The money will fund extension of Olkaria I and Olkaria IV power station project targeted for completion by end of 2013.

The overall cost of the project is Sh83 billion and is being co-funded by KenGen, World Bank, European Investment Bank, Japan International Corporation Agency and French Development Agency, AFD. "Development of renewable energy is excellent for development of Kenya and for the environment," remarked KFW Director General for Middle East and Africa Doris Koehn during the loan agreement signing ceremony held at KenGen offices in Nairobi.

Consultancy services for the three year project are being provided for by Sinclair Knight and Merz of New Zealand consultancy firm and entails tender document preparation, supervising construction contracts and technical design among other duties.

Ministry of Energy Permanent Secretary,Patrick Nyoike urged KFW to also consider setting up an insurance fund for underwriting steam fields. This, he said, would boost investor interest in geothermal energy development and spur more projects in the country.

Kenya is targeting to develop 5000 MW of geothermal power by year 2030 as stipulated in the country's planning document Vision 2030. Nyoike noted that this would be achieved faster if an insurance cover for dry wells was set up to absorb some of the losses in case an already drilled well is found not to have any steam. "A fund to underwrite any dry wells will attract more players in the geothermal field," explained Nyoike.