Govt. signs Sh100bn agreement with China for geothermal energy

The Chinese government is set to invest Sh100 billion in the country’s energy sector over the next 30 years.

This follows the amendment to a 2013 memorandum of understanding that will see both governments partner to unlock Kenya’s geothermal potential.

Since independence, Kenya has only been able to inject 600 megawatts of geothermal power into the national grid despite having a potential of 20,00o megawatts.

Energy and Petroleum Cabinet Secretary Charles Keter said the partnership with the Chinese government would fast track measures to ensure more geothermal power is available so as to provide cheaper and reliable power.

“We don’t have the money to put in but we have the steam. They don’t have the steam, they have the money so they are coming with the money so that we quantify the equivalence in terms of shareholding, either 50/50 but we leave it for the technical or the legal department,” Mr Keter said on Tuesday.

The new MOU will see the removal of restrictive conditions subjective to modular power plants by allowing the application of suitable technologies by the Chinese firm, China National Petroleum Corporation (CNPC).

“The essence of changing this is to fast track, once we have it and you see we are not burdening the exchequer. We still have diesel power plants and once we have this on stream, we can step down those that are very expensive,” he said.

The MOU will have to be approved by the cabinet followed by parliament, making China join Japan in the production of geothermal energy in the country in partnership with the government.

Through the agreement, KenGen and the Geothermal Development Corporation (GDC) will assist CNPC in drilling steam wells while the latter will invest in putting up power plants.

The government has increasingly been turning to renewable sources of energy to boost power production.

Geothermal, while  capital intensive, is considered as the best bet for Kenya’s energy plans.

Additional Reporting by Sophie Kinoti