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German Development Bank (KfW) has extended US$113mn in loans for the drilling of 20 exploration and appraisal geothermal wells in phase one of the Bogoria-Silali project in Kenya’s Rift Valley
According to the Geothermal Development Company (GDC), a government firm mandated to exploit geothermal power and the Bogoria-Silali project will generate 200MW of power when fully developed.
An interest rate of 1.75 per cent is attached to the loan facility that will have a grace period of five years and a repayment period of ten years.
“The national government is committed to diversification of energy sources which has previously been dominated by hydro-power. Unreliable rainfall and erratic weather patterns have affected hydro-power sources,” observed Kenya’s treasury cabinet secretary Henry Rotich.
GDC has sought private investors to inject money into geothermal power generation in recent years.
Last year, KfW injected US$100mn into the Bogoria-Silali project with US$300mn coming from US Export-Import Bank (Exim Bank).
The aim is to expand geothermal production from the two main areas of Ol Karia, south of Naivasha town and Menengai, just outside Nakuru.
The drilling will take place at seven fields, at Bogoria, Azuri, Baringo, Korosi, Silali, Lipaka and Chepchuk.
A private investor, Marine Power Generation (MPG) has interest in drilling near Akiira Ranch, Mlima Panya and Mount Margaret in Suswa.
Other investors in the geothermal power generation projects in Kenya include the African Development Bank (AfDB), the French Development Agency (AFD) and the World Bank.
With an estimated geothermal power potential of between 7,000MW and 10,000MW, Kenya is yet to fully benefit from their renewable energy as only 200MW is exploited.
The country plans to generate 5000MW by 2018 with most of the power coming from renewable sources such as geothermal, hydro and wind.