KenGen eyes more geothermal drilling deals as it moves to cut reliance on Kenya Power revenues

KenGen Geothermal Plaza offices, Naivasha. [Jonah Onyango, Standard]

Kenya Electricity Generating Company (KenGen) is in talks with three countries for geothermal drilling contracts as it seeks to cut reliance on revenues from Kenya Power.

Chief Executive Rebecca Miano said yesterday the firm is in discussions with DR Congo, Comoros and Rwanda for drilling works that will see it earn additional revenues.

“We are crossing our fingers as we discuss with other countries that have geothermal resources. Comoros, Rwanda and DRC have asked us for a few details on whether we can support them on their geothermal strategy,” said Ms Miano.  

If the talks are successful, the three countries will add to Ethiopia and Djibouti where KenGen is currently drilling geothermal wells at a fee.

The power generating firm has close to four decades of experience in steam power and runs several geothermal stations in Kenya, with Olkaria I power station being the first geothermal power plant in Africa.

Speaking after the firm's Annual General Meeting in Nairobi, where shareholders endorsed Sh1.98 billion dividends, Miano said KenGen is also eying consultancy works as well as operation and maintenance of power plants. “If we find opportunities for maintenance and operation of power plants, we will consider,” she said.

KenGen booked Sh1.78 billion revenues from drilling geothermal wells in Ethiopia during the financial year ended June 2021 and will be hoping for more in the current financial year following the start of works in Djibouti.

The firm, which controls 64 per cent of the electricity generation market share, wants to ride on such initiatives to de-risk itself from the single buyer risk posed by the country's sole electricity distributor Kenya Power.

KenGen supplies all its electricity to Kenya Power on a 40-day credit window, but the power distributor has been breaching the terms of payment.