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Kenya is soliciting partnerships with Italian investors in order to build its geothermal capacity

March 28th 2023, 3:50:15 pm
Kenya is soliciting partnerships with Italian investors in order to build its geothermal capacity
  • In a bid to increase its national installed geothermal capacity to 10,000 MW by 2037, Kenya is looking to partner with Italian investors.
  • This is more than ten times the present capacity of 949.13MW as of June 2022.
  • An agreement was made in October 2022 between Unione Geotermica Italiana (UGI) and the Geothermal Association of Kenya (GAK), under which Italian investors will invest in selected geothermal projects.

Kenya is looking for Italian investors to help it reach its goal of increasing its national installed geothermal capacity to 10,000 MW by 2037. This is more than ten times the present capacity of 949.13MW as of June 2022.

Notwithstanding the enormous potential given by geothermal output, its development has been gradual, owing to, among other things, the large upfront financial commitments necessary by IPPs for infrastructure development; exploration, geothermal well drilling, and power plant building.

To that end, the Ministry of Energy and Petroleum is organizing the Italian-Kenya Business Investment Forum with an emphasis on Geothermal energy, with the goal of encouraging collaboration between energy institutions and firms in both countries.

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The event aims to provide Italian participants with new potential for geothermal investment, technical and commercial collaboration with Kenyan peers.

According to Alex Wachira, Senior Secretary, Ministry of Energy and Petroleum, despite Kenya being the first in Africa and ninth internationally in geothermal development, the country produces less than 1,000MW, leaving a massive potential of nine GW untapped.

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“Attaining Kenya’s geothermal development targets, still requires investment at a level beyond what the government can make available which calls for enhanced private sector participation,” said Wachira.

He observes that, while the private sector is interested in improving power supply (downstream), a combination of considerable capital investment requirements and high resource risks has restricted private sector interest in geothermal development.

Geothermal now accounts for about half of the total power output in the country, with an installed capacity of 949.13MW as of June of last year. KenGen provided 82.6% of the installed capacity, while IPPs generated the remainder.

The event, organized by the United Nations Industrial Development Organization (UNIDO), follows an agreement made in October 2022 between Unione Geotermica Italiana (UGI) and the Geothermal Association of Kenya (GAK), under which Italian investors will invest in selected geothermal projects.

The Kenyan government has granted exploration and development licenses for geothermal resources to two public power companies and fourteen (14) Independent Power Producers (IPPs) in order to develop some of the current 23 geothermal fields/prospects.

Increased investment, on the other hand, has seen the East African economy rise in worldwide rankings, with freshly commissioned geothermal stations bringing Kenya's capacity closer to the geothermal "gigawatt club."

The International Renewable Energy Agency’s renewable energy statistics 2022 ranked Kenya’s 863MW geothermal capacity at position seven globally.

Chinedu Okafor
Chinedu is a Senior Reporter at Business Insider Africa with 5 years experience creating profoundly engaging and insightful content.

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