Japan not China gets key geothermal contract in Kenya- The Exchange

Kenya Electricity Generating Company has awarded the development of a geothermal site to a Japanese company. Though Japanese entities have always dominated contracts in the Geothermal Industry, Kenya has been awarding major infrastructural projects to Chinese entities.

Marubeni Corporation has been awarded a full turn-key engineering, procurement and construction (EPC) contract to construct a 70MW class geothermal power plant in the Olkaria area of Kenya’s geothermal belt.

This will be Marubeni’s first geothermal power plant project in Africa. The goal of this Project, which is expected to be completed in 2021, is the construction of a sixth power generation unit within Olkaria1 Geothermal Power Station.

The main components required for this Project, such as steam turbines and generators, will be provided to Marubeni by Fuji Electric Co., Ltd. Japan. This Project will be financed by an ODA loan from Japan International Cooperation Agency (JICA) and also by loans from European Investment Bank.

Geothermal power plants emit only a small amount of greenhouse gases and are moreover a stable source of energy as they are not disturbed by the weather. For these reasons, geothermal power plants are an important base load energy source, producing roughly 43% of the electricity generation in Kenya.

Peak demand in Kenya has been increasing by an average of approximately 5% annually. Marubeni has announced its commitment to meeting Kenya’s robust electricity demand and contributing to the Kenyan economic development.

This Project is one part of the expansion Marubeni has been making into the renewable energy generation business. Marubeni has a power plant construction track record of more than 900MW from geothermal power plants. Additionally, Marubeni has construction experience and power generation assets in solar, wind, hydro and biomass power plants all over the world. Marubeni aims to increase its net renewable energy generation capacity in the portfolio to approximately 20%, doubling the past target in 4-5 years.

On March 16, the Japan International Cooperation Agency (JICA) signed a loan agreement with the Government of the Republic of Kenya in Nairobi to provide a Japanese ODA loan of up to 10.077 billion yen for the Olkaria I Units 1, 2 and 3 Geothermal Power Plant Rehabilitation Project.

The project will rehabilitate units 1–3 (15 megawatts each) of the existing Olkaria I Geothermal Power Plant to approximately 51 megawatts (17 megawatts each) in the Olkaria geothermal field in Nakuru County in central Kenya.On March 16, the Japan International Cooperation Agency (JICA) signed a loan agreement with the Government of the Republic of Kenya in Nairobi to provide a Japanese ODA loan of up to 10.077 billion yen for the Olkaria I Units 1, 2 and 3 Geothermal Power Plant Rehabilitation Project.

Since units 1–3 of the Olkaria I Geothermal Power Plant were constructed by a Japanese company in the 1980s, the units have suffered from a lower operation rate and increased maintenance and management costs after more than 30 years of operation.

By maintaining and reinforcing the supply capacity of the existing power generation facilities, the project aims to contribute to a stabilization of the power supply even as the power demand rises. Through the use of geothermal power production, it is expected that the emission of air pollutants and carbon dioxide will be curbed greatly compared to the operation of thermal power plants of the same capacity.