KenGen is seeking to finance three geothermal plants through public-private partnership (PPP).The State Corporation Company is looking for private investors to finance Olkaria 6 at a cost of KES39.9bn. This will be the firm’s first project financed under public-private partnership. The National Treasury is discussing on amounts each financier will remit and the period which it will be financed under the model.
“KenGen will be tasked to provide steam while private firms will build the project, own and operate until they get back their investments. The firms could be selected through a competitive binding,” reports a local daily.
In 2013, PPP Act came into force which would reduce Treasury’s over reliance on borrowing and free domestic resources for use in the provision of social services. The government has also planned for 70 mega infrastructure projects under public-private partnership financing model thus,more PPPs are expected to be formed as the country tames public debt that hit unsustainable level due to government’s borrowing to finance mega infrastructure projects.
KenGen joins Kenyatta University who signed an investment plan with Africa Integras under PPP to construct a hostel of KES5.1bn under PPP model. This latest development comes after African Development Bank announced that Kenya will be the center resource hub for PPP.