KenGen Wins Ksh 5.8B Tender to Drill Geothermal Wells in Ethiopia

Kenya Electricity Generating Company (KenGen) has been awarded Ksh5.8 billion contract to drill 12 geothermal wells in Ethiopia – the second project for KenGen in Ethiopia after it won a contract to drill geothermal wells for the Ethiopian Electric Power (EEP) in Aluto, Ethiopia earlier in February this year.

The contract was awarded by Ethiopia’s independent power producer Tulu Moye Geothermal Operations (TMGO) PLC and will include installation of a water supply system and equipment.

In addition to drilling the wells, KenGen will also supply, operate and conduct maintenance of drilling equipment and the water supply system.

The project, which will be implemented in two phases, is funded World Bank through a loan placed to the Ethiopian Government which amounts to, USD 76,801,344 (about Ksh 7.6 billion).

Phase I of the project will comprise the purchase of drilling rigs while the provision of drilling services will be done in Phase II. KenGen is supplying about 30 per cent of the components of Phase II which translates into about USD 6.2 Mn (about Ksh 620 Mn).

“As top geothermal energy providers in Africa, KenGen has been an inspiration to the region. TMGO is thrilled to become development partners with such a powerhouse; this agreement is a sign of mutual trust and commitment to advancing geothermal energy, which in turn encourages sustainable development in Ethiopia and Africa as a whole,” a statement from the signing said.

KenGen has a geothermal installed capacity of 698MW making it the largest geothermal producer in Africa and the 9th globally.

In its latest financial year earnings, KenGen’s revenue generated from geothermal power plants increased from Sh16.1 billion in 2017 to Sh17.1 billion in 2018, which was a growth of six per cent.