The Japan International Cooperation Agency (Jica) on 16 March signed a loan agreement worth up to Y10,077m ($95m) for a project to rehabilitate units I-III of the Olkaria I geothermal complex in Nakuru county, Kenya. KenGen has been exploring possibilities to improve output from the aging facility, which was commissioned in the 1980s and built by Hyundai Engineering Company and Toyota Tsusho Corporation.
Consultants were appointed in 2015 and 2016 to assess whether the plant should be replaced by a new facility or upgraded. The United States-based Power Engineering, which led the team, assessed power plant components, Turbocare Inc looked at the condition of the turbines, Viezades and Associates assessed steamfield and injection systems, and Nairobi-based Log Associates prepared an environmental and social impact assessment and decommissioning plan.
The study recommended that an extensive rehabilitation should be undertaken to upgrade and modernise key components of the plant, but that the basic design structure of the facility should be maintained. The work will increase the capacity of each unit to 16.9MW from the current 15MW.
Jica is heavily involved in the geothermal sector in Kenya. The organisation signed a Y29,516m loan for the construction of Olkaria I units IV and V in 2010 and a Y46,690m loan for Olkaria V in March 2016. A Y12.41bn loan was approved in December 2010 for the Olkaria-Lessos-Kisumu transmission line, which helps evacuate power from the Olkaria plants. Jica is also supporting the Project for Capacity Strengthening for Geothermal Development in Kenya, which has run since September 2013 and will end in February 2019, and is facilitating technical cooperation to improve geothermal technology in the country.
There are likely to be developments in geothermal policy in Kenya in 2018 following a hiatus during elections last year. The World Bank Group is supporting the development of a National Geothermal Strategy in the country which is expected to be adopted this year. The strategy will argue that geothermal development on the scale desired by the Kenyan government will require private resources. While KenGen has continued to develop the Olkaria complex, private geothermal initiatives have had much more difficulty getting going.
“The document really lays out the challenges of independent power producer development”, World Bank Energy and Extractives Global Practice senior economist Sudeshna Ghosh Banerjee told African Energy. “It looks at the experience of the private sector in geothermal so far and how the private sector will participate across the value chain in the geothermal sector going forwards.”
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