The block in Kenya’s Rift Valley has potential of 3,000MW.
GDC wants to develop 800MW with investors financing, designing, constructing, operating and maintaining the plants but work is to be scaled up in future.
Investors are required to raise $400 million for each 100MW as the GDC is undertaking steam field development in the Bogoria-Silali block comprising Bogoria, Baringo, Arus, Korosi, Chepchuk, Paka and Silali prospects.
GDC’s managing director Silas Simiyu said installing of well-head generators is vital as Kenya’s current peak power demand of about 1,200MW is projected to grow by 10 per cent to 17,000 megawatts in 20 years.
“GDC is a 100 per cent state-owned corporation, tasked with accelerating development of geothermal resources to support development of at least 10,000MW by 2030 in line with Vision 2030 targets,” he said.
In Bogoria-Silali block, the plan is to develop 2,000MW in four phases.
The first phase targets plants of 800MW plants by 2017, phase two 400MW by 2019, third phase 400MW by 2021 and phase four has 400MW by 2023.
Development plan of phase one has configuration of eight geothermal plants each with an output of 100MW projected to be completed by 2017.
From January next year, 200 wells are to be drilled by the GDC using eight rigs.
The capital structure for each power plant is at least 25 per cent equity and 75 per cent debt, making it a prerequisite for an investor to have capacity to raise $400 million supported by letters from credible financiers.
The state corporation is in the process of shortlisting potential investors who will invest in the power plants and also have an opportunity of installing well-head generators as drilling continues.
The GDC will undertake resource development, management — development of civil infrastructure, exploration and appraisal drilling, feasibility studies, production drilling, reservoir, condensate and brine system management.
Mr Simiyu said selected investors will partner in financing steam development with funds obtained from them (investors) on agreed terms and conditions being a loan to the GDC payable from steam sales revenues.
“The government of Kenya will not provide sovereign guarantees relating to this investment. Investors should seek alternatives such as Multilateral Investment Guarantee Agency of World Bank,” he said.
The deadline for investors to submit expression of interest is August 8, before 2pm.
The short listing is expected to be finished in September followed by request for detailed proposal.
Selection of preferred investors will be completed by December next year.
The East African
Award will be subject to investor successfully negotiating power purchase agreement with the Kenya Power and Lighting Company.