World Bank setting up US$13 million exploration risk mitigation fund for Kenya
KenGen Olkaria II plant, Kenya (source: constructionkenya.com)
Alexander Richter
6 Eyl 2011
To accelerate geothermal development in Kenya, the World Bank has developed a US$13 million drilling risk mitigation fund.
“The World Bank has developed a US$13 million risk mitigation fund in an effort to accelerate geothermal development in Kenya and underwrite dry well drilling in the event that a well does not have any steam.”, so news from yesterday.
“Mits Motomoshi, an Energy and Financial Specialist with the World Bank said that the Bretton Woods institution was in talks with the Kenyan government and the International Geothermal Association on how the fund would be used in future drilling exercises.
“We have started discussions with development partners and the government as they start exploration in the Rift Valley,” said Motomoshi.The Kenyan government is on a mission to switch to more renewable sources of energy such as geothermal and wind, as the vagaries of weather wreak havoc on hydro-generation of power.
However, the high upfront costs associated with geothermal exploration have slowed down progress on harnessing. With an estimated potential of 14 000 megawatts (MW), the country has only been able to harness 265MW out of a total installed capacity of 1 185MW.
Geothermal Development Company (GDC) Managing Director Dr Silas Simiyu said it cost Sh400 million on average to drill a single well, making the process slow and expensive.
“The way things have been done in the past is that you wait for an investor to come and put in money before you have even been shown that existence of the resource. But with the fund it is very easy for partners to come on board because there is evidence the resource is there,” said Dr Simiyu.
GDC, with two drilling rigs, is in the process of securing four more rigs that will speed up geothermal exploration.
Dr Simiyu said that to accelerate the speed of power connection to the national grid, GDC intends to use wellhead generation technology to be installed as soon as a well is drilled.
“The wellhead power generators will enable us to move quickly and start injecting power to the grid and recoup our costs,” he said.”
Source: CAJ News Agency
