OLKARIA I GEOTHERMAL EXTENSION

Promoter – Financial Intermediary

KENYA ELECTRICITY GENERATING COMPANY LTD

Location

• Kenya

Description

The project consists of the extension of the existing 140 MW Olkaria I Unit 4 & 5 geothermal power plant with an additional 70 MW turbine (Unit 6), the necessary wells, steam-gathering system and interconnection facilities.

Objectives

The project will help meet growing electricity demand at a competitive cost. Its economic benefits include increased power generation, improved security of supply (geothermal power is unaffected by annual hydrological conditions), reduced national dependence on imported fossil fuels for electricity generation, fewer emissions associated with conventional thermal generation and additional operational flexibility with the greater Olkaria geothermal generation park.

Comments

The Government of Kenya, in its Vision 2030 development programme launched in 2008, has identified energy as being one of the key enablers to attain 10% GDP growth target. The project will provide renewable energy to bridge the existing gap between energy demand and supply in Kenya and it will help mitigate the impact of climate change. The investment is in line with the Sustainable Development Goals (SDGs), especially SDG 7 "Ensure access to affordable, reliable, sustainable and modern energy for all".

Sector(s)

• Energy

Proposed EIB finance (Approximate amount)

EUR 72 million

Total cost (Approximate amount)

EUR 311 million

Environmental aspects

If located inside the EU, the project would fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2011/92/EU, requiring a screening decision by the competent authority. Kenyan law requires a full EIA. An environmental and social impact assessment (ESIA) has been established for the new unit and has been approved and a respective licence issued by the NEMA (National Environmental Management Authority). As with the other units of Olkaria I power station, the project lies in the Hells Gate National Park, where there is no human settlement. The Bank will ensure that the project complies with its environmental and social standards.

Procurement

The promoter is a utility majority-owned by the Government of Kenya. For the project it will adopt open competitive tendering procedures and envisages publication in the Official Journal of the EU for the main contracts. The Bank will require the promoter to ensure that any procurement procedures are done in accordance with the Bank's Guide to Procurement.

Status

Signed - 8/09/2017