SHOWCASE FOR GEOTHERMAL IN KENYA
International Geothermal Showcase September 29, 2014, Washington, DC
PRESENTED BY:
ENG. STANLEY K. KAMAU
DIRECTOR, PUBLIC PRIVATE PARTNERSHIP UNIT,
NATIONAL TREASURY, KENYA
REPUBLIC OF KENYA
THE NATIONAL TREASURY
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KENYA
Area: 583,000 sq. km
GDP: USD 44.1 Billion (2013)
Population: 44.35 Million (2013)
GDP per Capita: USD 994.31 (2013)
GDP: USD 52.8 B(Revised by 20% Sept 2014)
GDP Per Capita: USD 1,190 (Revised by 20% Sept 2014)
GDP % Growth: 4.7% (2013), –focus by WB and IMF of 6% in
medium term
Debt/GDP: 51.7% (2013)
The Standard and Poor’s rating for Kenya is B+ stable
Fitch rating is B+ positive.
Gateway to:
East Africa Community (Kenya, Tanzania, Uganda, Rwanda, Burundi):
150 million people, among the fasted growing regions in the world (5.3%
growth GDP compared to 3.8% world growth) – 150 million addition (DRC,
Ethiopia, Southern Sudan, Somalia)
The discovery of Oil, Rare Earth, others: A game changer
1 MAJOR INVESTMENTS REQUIRED IN KEY INFRASTRUCTURE
Source: TMO
Category Type
• Sewerage Systems
• Irrigation & Drainage
• Dams & Water Storage
• Supply & Sanitation
• Power Generation
• Power Transmission
• Power Distribution
• Oil & Gas Systems
• Roads
• Pipelines
• Railway
• Harbours & Airports
• Mobile Telephony
• Fibre Networks
• Satellite
• Telecommunications
Key
Infrastructure
Required
Water
Transport
Energy
Communication
“ Energy is the
engine of the
economy”
Infrastructure Funding Gap of USD 2 - 3 Billion per Year
• .
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Enabling Framework for PPPs/IPPs in Kenya: Kenya has a New Constitution (2010) that provide
democratic and governance institutions (stability,
judiciary, etc.)
PPP Policy issued by Government in December, 2011
The Public Private Partnerships Act, 2013 (PPP Act)
Risk mitigation (Letters of Support, Guarantees
(Demand/Traffic Guarantee), subsidies etc;
Compensation for termination/ extra-ordinary events/
direct impact of change of Laws/political event
Direct Agreement and step-in rights to Lenders;
Establishment of a Project Facilitation Fund (Viability
Gap Fund, PDF, subsidies)
PPP Regulations finalized
PPP Unit at National Treasury to oversee the PPP
process
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Selection of a Private Party and Key Principles
PPP Projects can be initiated in two ways:
Solicited bids; and
Privately initiated investment proposals.
The 3 Core Principles in PPP Procurement:
Value for Money
Affordability; and
Risk Transfer (optimal allocation).
KETRACO
Policy &
Dispute
Resolution
Consumers
KPLC
Ministry of Energy & Petroleum
KNEB Energy Tribunal
ER
C
KenGen GDC IPP
GDC/KenGen/
IPP Early
Generation
REA KPLC Private Discos
Generation:
Hydro
Thermal
Geothermal
Wind
Co-generation
Transmission
>66kV
Industrial
Commercial
Domestic
Distribution
Source: Update of Kenya’s Least Cost Power Development Plan 2010-2030
3 NATIONAL CAPACITY EXPANSION PLAN –
2010 to 2030
17,764
4,679
Imports
(Hydro)
2,200
Nuclear
4,200
Coal
4,200
Geothermal Wind
1,600
Hydro
412 263
Medium
Speed
Diesel
Total
Capacity
Gas
Turbine
210
Planned
for 2022-
2030
National Capacity Expansion (17,764MW) - 2030 Investment Estimates (US$)
• ADEQUACY
• AFFORDABILITY
• DIVERSIFICATION
• ESTIMATED
INVESTMENTS
US$ 38billion by
2030
TARGETED GENERATION CAPACITY (5,000MW) -2017
TIME IN MONTHS 0 6 12 18 24 30 36 40
HYDRO 770 794 794 794 794 794 794 794
THERMAL 622 709 782 782 782 432 432 432
GEOTHERMAL 261 331 507 697 747 952 1102 1887
WIND 5 5 5 25 85 385 635 635
COAL 0 0 0 0 0 960 960 1920
LNG 0 0 0 0 700 1050 1050 1050
CO-GENERATION 26 26 26 44 44 44 44 44
RETIREMENTS 90 350
CUMMULATIVE TOTAL 1684 1775 2114 2342 31526 4618 5017 6762
Generation Tariff (US$cts/kWh) 11.3 10.14 9.93 8.74 8.07 7.38 7.58 7.41
Industrial/Commercial tariff (US$cts/kWh) 14.14 12.77 12.49 11.03 10.08 9.03 9.32 9
Domestic Tariff Progression (US$cts/kWh) 19.78 18.3 17.73 15.85 13.46 11.14 11.19 10.43
Geothermal in Kenya (10,000MW)
• Suswa, • Longonot, • Olkaria, • Eburru, • Menengai, • Arus-Bogoria, • Lake Baringo, • Korosi, • Paka, • Lake Magadi, • Badlands, • Silali, • Emuruangogolak, • Namarunu • Barrier • Mwananyamala • Homa Hills • Nyambene • Chyulu Hills 12
STATUS OF GEOTHERMAL DEVELOPMENT
45MWe Olkaria I Power station
105 MWe Olkaria II Power station
PLANT
OLKARIA I (3 UNITS X 15 MW) 45 MW
OLKARIA II (3 UNITS X 35 MW) 105 MW
OLKARIA III (ORMAT) 110 MW
OSERIAN (TWO UNITS) 4 MW
EBURRU 2.5 MW
OLKARIA (WELLHEAD) 30MW
Olkari 4 140
Olkaria1 Unit 4 70
100 MWe Olkaria III Power station
505.5 MW
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History of PPP Transactions Westmount 46 MW (not active), Iberafrica 1997 (56MW and 53 thermal), 74
MW Tsavo/Kipevu , 2000, Orpower -Olkaria III 2000/2008 (48MW Geothermal
Plant plus 52MW in 2013), Mumias (34MW); 90 MW Rabai 2009, Mumias
26MW cogeneration.
IPP Name Type Capacity MW Remarks
Thika Power Thermal 87 commissioning
Triumph Thermal 82 Financial Close
Gulf Power Thermal 80 Commissioning
Orpower Geothermal 52 commissioned
Lake Turkana Wind 300 Financial Cose
Longonot Geothermal 140 Under negotiations
Kinangop Wind 60 FC Dec 2012
Kipeto Wind 100 FC
GDC (3 IPP) Geothermal 105 PRG negotiations
Small Hydros Hydro 20 PPA
TOTAL 1026
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Independent Power Project (IPP) Structure
THANK YOU!
YOU ARE INVITED TO
INVEST IN kenya.
IT IS THE PLACE TO
BE!! [email protected]; www.pppunit.go.ke
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