Kenya's KenGen plans to expand geothermal projects into Tanzanian market
What you need to know:
- Tanzania’s government has already identified the area around Lake Ngozi to pilot geothermal power production, prospects that KenGen is keen to tap into and grow revenues.
KenGen is eyeing drilling deals in Tanzania in what looks set to cement the Kenyan electricity producer as the leading geothermal power company across the continent.
KenGen acting managing director Abraham Serem told the Business Daily that the firm is awaiting a response from the Tanzanian government for two projects whose value remains undisclosed.
Entry into Tanzania adds to similar projects in Ethiopia, Djibouti and Rwanda, cementing KenGen’s fast-rising reputation as the go-to company in exploring and drilling geothermal wells.
The firm has been aggressively looking for opportunities to offer its geothermal services in its revenue diversification plan.
“We have responded to expressions of interest for two from Tanzania and we are waiting for their response. Some are for studies and others for drilling,” said Mr Serem.
The President Samia Suluhu-led government has already identified the area around Lake Ngozi to pilot geothermal power production, prospects that KenGen is keen to tap into and grow revenues.
The Tanzania Geothermal Development Company advertised a tender for the drilling and testing of wells in the region last November.
The nation estimates its geothermal potential at 5,000 megawatts and targets to make its maiden production before 2025.
KenGen, which is 70 percent owned by the Kenyan government, has in the past four years raked in billions from drilling projects in Ethiopia and Djibouti, significantly boosting its books.
The firm has since 2019 won contracts worth an estimated Sh14 billion to drill wells and offer consultancy services in Ethiopia and Djibouti.
KenGen’s latest deal outside Kenya was the Ksh709 million (about $6.5 million) contract to drill three geothermal wells in Djibouti.
The Djibouti deal came two years after the firm won two contracts worth an estimated Ksh13.4 billion to drill wells in Ethiopia and offer consultancy services.
The power producer has also been seeking to engage with the governments of Rwanda and DR Congo geoscientific studies with an eye on drilling geothermal wells subject to the findings of the surveys.
KenGen accounts for at least half of the electricity in the national grid, mainly attributed to its vast geothermal production in the Olkaria region of Naivasha.
Kenya is Africa’s number one geothermal energy producer and among the top 10 in the world with an installed capacity of 863 megawatts. KenGen contributes about 713 megawatts.
The firm estimates Kenya’s geothermal potential at 10,000 Megawatts spread along the Rift Valley belt.
Kenya ranks eighth globally in geothermal power generation, highlighting KenGen’s impact in tapping clean energy.
