Opinion

Puzzle Of Stalled Menengai Geothermal Power Project

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Yesterday the Business Daily reported that; “Baringo Senator Gideon Moi has bought back a majority in a company that won a lucrative deal to build a 35-megawatt geothermal power plant in Menengai, Nakuru County from steel and cement tycoon Narendra Raval.” Moi had sold a majority stake in the firm to Raval in 2017.

The Moi owned firm was among three that got contracts to build power plants totaling 105 MW at the Menengai geothermal fields in 2014. Eight years after winning the contract none of the firms has built the plants. Only one of the IPPs was reported to have achieved financial closure as of 2020.

This project raises a lot of questions. How were these firms chosen yet they do not seem to have had the capacity to implement the projects? Why couldn’t the Menengai project be operated through KenGen the way it has been with the Olkaria geothermal fields? Why are these firms still holding these licences without demonstrating any progress?

How did a company owned by the then Chair of the Energy Committee in the Senate get awarded a contract in the energy sector? Isn’t this outright conflict of interest? The African Intelligence reported last year that the same company was about to clinch a contract to built a 40 MW solar power park at the Konza Technocity. Why would it be considered for such when it hasn’t delivered on the contract it won in 2014?

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GDC drilled the wells and built the steam gathering system. Even the line to evacuate the power was done. Yet after all this investment the country has nothing to show for it. Why can’t they even utilise the wellhead technology which allows for generation of power from the wells pending construction of the power plants?

A progress report by African Development Bank in 2020 shows that the project was partly financed by loans amounting to over KShs 9 Billion. This is a lot of money to be wasting this way.

There is this madness that goes on in Africa where companies get concessions and hog public resources which they trade in and never get anything off the ground. This happens a lot with mining concessions. Could this be what is going on?

GDC should fast-track this project to ensure the country realises the expected value for money. Parliament should ensure that all those responsible for the delays are held to account. Future development of the Menengai geothermal fields should be done by GDC and KenGen without involvement of IPPs.


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