A view of Olkaria KenGen geothermal energy power station, Naivasha
The Kenya Electricity Generating Company (KenGen) has received a Sh2.4 billion loan from the French Development Agency to develop a geothermal production unit.
In a statement released by KenGen on Thursday, the loan was issued without a government guarantee and it will be used to put up the third unit of Olkaria II.
Once complete, the power generation unit will supply an additional 35 MW of electricity to the national grid. KenGen plans to boost geothermal power generation capacity by 500 MW by 2012.
Initial synchronization of the work is scheduled for March 7, 2010 and KenGen is expected to take over the plant on May 12, 2010.
According to authoritative sources, the funding is currently being processed and is expected to be disbursed next April. The project will also receive funding by the World Bank, European Investment Bank and KenGen’s own resources.
The funding comes at a time when Kenya’s biggest power producer is fighting to catch up with the country’s fast growing power demand, despite the global financial crunch. Late last month, Kengen said pretax profits slumped 32.8 percent to Sh1.5 billion for the first half ended December from Sh2.3 billion in 2007. The dip was attributed to higher operational and financing costs, particularly due to high oil prices during the period. Operating costs increased 10% to Ksh.4.3 billion.
Meanwhile, KenGen Managing Director and Chief Executive Officer Eddy Njoroge was on Wednesday honoured by the President of France, Nicolas Sarkozy with the French Order of National Merit.
The medal of honour was presented to him in Nairobi on the President’s behalf by French Ambassador to Kenya Elisabeth Barbier in recognition of Mr Njoroge’s achievements at the helm of KenGen.
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