Kenyan Diaspora-Owned Firm to Invest $830 Million in Electricity Generation in Kenya
Posted by Administrator on February 26, 2012
Kenyan owned firms have lined up $930 million for the generation of 457 Megawatts of electricity from wind and solar as the country seeks to reduce reliance on the expensive hydro power.
Gitson Energy Ltd backed by Kenyans in the diaspora has a capital expenditure of $830 million and Bluesea Energy Ltd is investing over $100 million to avail affordable electricity upon completion of various projects.
Gitson plans to build a 300MW wind farm and 50MW solar plant at Bubisa in Marsabit while Bluesea Energy Ltd has projects for 40 MW in Isiolo, sevenMW in Belgut and 60 MW at Lambwe Valley to utilise wind.
Gitson will use US backed technology equipment for the wind farm and solar plant project to qualify for funding from EximBank and Overseas Private Investment Corporation.
Standard Charted Bank of South Africa, represented by CFC Stanbic Bank in Kenya was the lead advisor for the negotiations between EximBank and Overseas Private Investment Corporation.
Kenya is expected to reduce over reliance on power generated from hydro and fossil fuel sources in the near future when Gitson and Bluesea inject 457 MW of power from renewable energy sources onto the national grid.
Bluesea’s lead engineer, Sam Ochieng said projects at Ntumburi in Isiolo, Lambwe Valley and Belgut are at various phases of implementation and work at the first site is expected to be complete in November.
“We selected Nthumburi, Lambwe Valley and Belgut after carrying out feasibility studies for about two years and found out that they have adequate winds,” he said.
Installing of a wind mast and other facilities at Nthumburi and Belgut will be complete by November this year.
Construction work at Lambwe Valley will be finished in February 2013 and all the sites linked to the national grid.
“The target is to step up output from wind as a clean green renewable source,” said Ochieng.
Kenyans have in the past paid high power bills for thermal generation after diesel and fuel oil prices escalated due to global market volatility and output from water declined as a result of prolonged drought.
Costs of thermal generation are borne by customers as pass through items for Kenya Power that is mandated to distribute and supply electricity.
Gitson’s Chairman Dr Michael Nderitu said the Bubisa project in northern Kenya intends to use feed in tariffs developed by government to contribute to harnessing resources to satisfy energy needs at competitive prices.
“The Energy Act of 2006 empowers the Ministry of Energy to promote, develop and use of renewable energy sources like wind, solar, biogas and municipal waste to spur economic development,” he said.
Dr Nderitu said the Gitson is negotiating with Kenya Power for a power purchase agreement (PPA) specifying terms of injecting electricity to national grid.
“We expect to commence generation from 2013 once the site is linked to the national grid. Discussions are being held with Kenya Electricity Generating Company on the best way forward,” he said.
Gitson’s site could be connected to the national grid through the planned 1045 kilometre high voltage electricity transmission link between Ethiopia and Kenya to be completed by 2016.
Building work for the project valued at $1.2 billion is expected to start in mid 2013 to link Welayta Sodo in Ethiopia about 90 kilometres west of Moyale town in Kenya and to Suswa near Naivasha.
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