Orpower Naivasha plant
Orpower plant in Naivasha: Sh8.2 billion geothermal power plant set to be built in Menengai, Nakuru

A Mauritius-based power firm will in March start building Sh8.2 billion geothermal power plant in Menengai, Nakuru that will require 500 workers on the site, ending construction delays since 2014.

Quantum Power said the 35-megawatt power plant will take 18 months to build and is partly financed through loans from African Development Bank (AFDB). This came after the contractor finally secured a risk mitigation guarantee (letter of support) from the Kenyan government that cushions the investor from unforeseen political and economic risks such as a lack of market for its electricity.

“We’ll kick off the Menengai project in March, including the shipment of materials and equipment immediately we reach a financial close that we expect early March,” Quantum Power East Africa director David Caroll said. The Mauritian firm is one of the three companies that State-owned Geothermal Development Company awarded exclusive rights to build the Menengai geothermal project in 2014 under the public-private partnership model.

Each was to build 35 megawatts or 105 megawatts in total, but construction is yet to take off four years later. The other two selected firms are New York Stock Exchange-listed Ormat Technologies and local company Sosian Energy.

Last year, steel and cement tycoon Narendra Raval, the owner of Devki Group, became the full owner of Sosian Energy after buying Baringo Senator Gideon Moi’s stake in the company. Quantum Power is now set to become the first to break ground after receiving the much-awaited government letter of support last October. The State guarantee is booked as the national debt.

The $80 million (Sh8.2 billion) power project is being financed through a mix of debt (75 percent) and equity (25 percent). The State agency- GDC, which drills wells to find steam, has a deal with the three independent power producers (IPPS) to supply them with steam at a fee for them to convert it to electricity.

The IPPS will then sell the power they generate to electricity distributor Kenya Power at Sh9 ($0.088) per kilowatt hour for onward sale to homes and businesses. At Sh9 per unit, the IPPS geothermal rates are half those of expensive thermal generators.

Local firm H Young is currently building the network of pipes tapping underground steam to the sites where the power plants will be built.

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