KenGen seeks $82 million from government for geothermal wells drilled in Olkaria
Olkaria geothermal plant, Naivasha, Kenya (source: Lydur Skulason, creative commons)
Alexander Richter
4 Haz 2016
KenGen is seeking a refund of up to $82 million for the drilling of geothermal wells in Olkaria, Kenya in the year 2014, having drilled the wells for the Ministry of Energy and GDC.
Kenya Electricity Generating Company (KenGen) is seeking a financial refund from Kenya’s government for the drilling of geothermal wells of up to 280 MW in capacity in 2014, as reported from Kenya this week.
KenGen seeks a reimbursement of Sh 5.8 billion ($82 million) it has funded for the drilling of wells at Olkaria in Naivasha on behalf of the Ministry of Energy and Geothermal Development Company — the agency in charge of geothermal energy development.
“This amount has been outstanding since 2013 and earmarked to be settled in the current fiscal year,” said KenGen managing director Albert Mugo.
A payout looks set to strengthen the financial position of the utility firm which produces electricity for sale to Kenya Power which then retails to homes and businesses.
The Sh5.8 billion is equivalent to 21.8 per cent of KenGen sales of Sh26.5 billion ($254 million) for the year to June.
The injection of the additional 280 megawatts into the national grid in 2014 helped to reduce the share of expensive power supplied to consumers from diesel generators, cutting electricity bills by about 30 per cent.
Ministry of Energy officials said Wednesday that the government would settle the dues owed to KenGen. The government has a 70 per cent majority shareholding in the company.
“This will be settled. Remember they also owe us money in form of dividends,” said Joseph Njoroge, Energy PS in charge of electricity.
“The wells belong to the government and were developed using a loan facility which KenGen paid for on behalf of the government,” he added.
Source: Business Daily
