Chinese Firm awarded License for Geothermal Exploration in Suswa Kenya

Zhejiang Kaishan Compressor Company announced on Tuesday that it has received a permit to explore and develop geothermal energy in Kenya. 

According to reports in Global Times which quoted a filing the company sent to the Shenzhen Stock Exchange, the Ministry of Energy and Petroleum in Kenya issued the permit to Zhejiang Kaishan Compressor Company to explore and develop geothermal energy in the Suswa South-Magadi-Shompole area in Kenya, 

Zhejiang Kaishan will be allowed to conduct geothermal exploration in the permitted areas for three years, after which the company could start construction and operation of power facilities in the area.

The company joins a growing list of private companies involved in exploration of geothermal resources in Kenya that also includes Ormat, Akiira Geothermal, Africa Geothermal and Olsuswa Energy. Of these, Ormat is the only private company that is currently generating having an installed electric capacity of 139 megawatts of geothermal power at its Olkaria III power plant. Other companies are in different stages of surface exploration and drilling.

Kenya's installed steam power capacity currently stands at 676 MW and has an untapped potential of 10,000 MW of steam energy in the Rift Valley basin. The leading company in development of geothermal resources is Kenya Electricity Generating Company (KenGen). The 70% state owned company currently has an installed capacity of 533.8 MW in Olkaria and Eburru fields.

The state owned Geothermal Development Company (GDC) is currently developing the Menengai and Baringo-Silali fields. The company recently invited proposals from Commercial Banks to act as the Letter of Credit (L/C) Issuing Bank in connection with the Menengai project in Kenya. This will involve the issuance of a Standby L/C in favour of the three Independent Power Producers (IPPs) QPEA GT Menengai Ltd, OrPower 22 Limited and Sosian Menengai Geothermal Power Ltd that were awarded contracts to generate a total of 105 MW in the Menengai field. 

A drilling contractor, Hongkong Offshore Oilfield Services (HOOSL) was awarded the contract to drill 15 to 20 wells in the Baringo-Silali field and is expected to start mobilizing to the area soon. The project financed by German development bank KfW, through concessional loan of KSh 9.5 billion ($90.5 million) is expected to develop 100 MW in the first phase with the field estimated to have a potential of 3,000 MW.