MPs Direct Kenya Power To Halt Contract With Geo-Firm

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Legislators have ordered Kenya Power to issue a termination notice of its deal with Africa Geothermal International by the mid this month over the firm’s continued delays in starting exploration of geothermal power on an allocated block.

The MPS demanded that Kenya Power issue a 30-day termination notice for the Power Purchase Agreement (PPA) signed in 2015 to allow KenGen to start prospecting for geothermal on the block allocated to the private power producer in Nakuru County.

The block has 34 wells, where 26 are targeted to be production wells while eight will be injection wells. Its power generation is tipped at 1,170 Gigawatt hours.

KenGen, which is the biggest supplier of energy to the national grid accounting for 60 percent recently disclosed plans to ramp up production of geothermal energy in efforts to supply cheap and clean energy to Kenya Power.

“Kenya Power should issue a 30 days’ notice of intention to terminate the PPA with Africa Geothermal International Limited due to inactivity on the allocated area and report to the Senate within 45 days of the adoption of this report,” the Senate Committee on Energy says in the report.

“Africa Geothermal Company who had been allocated geothermal resource blocks by the Ministry of Energy and whose PPA became effective in 2015 has not had any activity on the allocated area. The geothermal ecosystem in Olkaria is almost depleted.”

Geothermal sources are key to Kenya’s efforts of fully greening the grid, signaling the latest push to have KenGen take over the block owned by Africa Geothermal International.

KenGen’s track record of speedily delivering geothermal power plants is also seen as another reason behind the push to have them take over the un-tapped block.

Kenya Power Managing Director Joseph Siror had not responded to Business Daily queries on whether the utility has written to Africa Geothermal International.