KenGen clinches sh5.8 billion deal to drill geothermal wells in Ethiopia

Kenya Electricity Generating Company (KenGen) PLC has clinched a sh5.8 billion contract to drill 12 geothermal wells in Ethiopia, signifying new doors for both Ethiopia and KenGen.

The contract with Ethiopia’s independent power producer Tulu Moye Geothermal Operations (TMGO) PLC will also include installing a water supply system and equipment.

KenGen will supply drilling materials and provide operation and maintenance services for both the drilling equipment and the water supply system.

Speaking on the project, KenGen Managing and CEO, Mrs. Rebecca Miano, said it was the second and the company’s largest consultancy outside Kenya.

In February this year, KenGen won a contract to drill geothermal wells for the Ethiopian Electric Company in Aluto, Ethiopia.

The contract in Aluto is for the implementation of drilling rigs and accessories as well as rig operation and maintenance for drilling geothermal wells. It is financed by the World Bank through a loan to the Ethiopian Government to the tune of USD 76,801,344 (sh7.6 billion)

The project is being implemented in two phases; phase I comprises the purchase of drilling rigs while Phase II entails the provision of drilling services. KenGen is supplying about 30 percent of the components of Phase II which translates into about USD 6.2 million (sh620 million).

Speaking on the new deal with Tulu Moye, the KenGen MD said they are excited their efforts bore fruit. “Being fully aware of the task ahead of us, we have rolled our sleeves and are now all set and ready,” he noted.

TMGO is an IPP owned by two equity partners namely Meridiam – the majority shareholder with 51 per cent and Reykjavik Geothermal which owns 49 per cent.

The new projects come at a time when KenGen has embarked on a diversification strategy. It is leveraging its expertise in geothermal energy by offering commercial drilling services, geothermal consulting and other related services across Africa. The organization is also exploring expansion opportunities which will include oil and mining sectors in the region.

KenGen will build the capacities of teams from Ethiopia who will be working on the project. The company also has a Geothermal Centre of Excellence which conducts training programs for both local and international students.

Kenya is Africa’s number one geothermal energy producer and among top 10 in the world. The country has an estimated potential of 10,000MW along the Rift Valley.

KenGen has a geothermal installed capacity of 698MW and is the leading geothermal power producer in Africa.


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