Kenya Power has signed a 70-megawatt power purchase agreement (PPA) with a company that is partly funded by US President Barack Obama’s Power Africa initiative, boosting the country’s goal of adding 5,000MW to the installed capacity in the next two years.
Under a 25-year PPA, Kenya Power will buy electricity from Akiira Geothermal Ltd at Sh9.3 per unit (9.23 US cents), which is about half the current cost of thermal power.
The project is based in Akiira Valley, adjacent to Olkaria in Naivasha, and is partly owned by investment firm Centum.
“The 70 megawatts are expected to be added to the grid by December 2016 in line with our energy targets,” Kenya Power managing director Ben Chumo told a Press briefing yesterday.
The Akiira geothermal project received a $1 million (Sh101 million) grant last October from the US-based Overseas Private Investment Corporation (OPIC) to meet technical and legal expenses as part of President Obama’s policy initiative to light up the continent.
Akiira chief executive Robert Bunyi said that exploration and drilling of steam wells was ongoing.
Kenya is racing to cut reliance on expensive power from diesel-run generators with cheaper, renewable energy sources (hydro and geothermal) currently accounting for over 85 per cent of the energy mix.
The Uhuru administration in 2013 set a target of injecting an additional 5,000MW to the grid by 2017. Currently, the country has an installed capacity of 2,298MW compared to 1,708MW two years ago.
Kenya Power yesterday also signed a PPA with Kleen Energy, owned by local investors from Embu, to generate six megawatts of power by August next year at a feed-in-tariff of Sh9.2 per unit (9.20 US cents).