Kenya has dropped independent power producers (IPPs) as partners to develop the second and third phases of the 465 MW Menengai geothermal project, located about 185 km northwest of capital city Nairobi. The first phase of the project (105 MW) was awarded to three IPPs, namely Orpower 22, Quantum Power East Africa, and Sosian Energy, which are each developing 35 MW. Progress has been slow - construction was expected to start in 2018 and is now expected in 2021 - and the projects have been delayed by more than two years to 2027. The government has thus selected the state-owned power utility KenGen to develop the second phase (60 MW) and the third phase (300 MW) of the project. KenGen would partner with an equity investor that could take up to 70% in the geothermal projects, while the state-owned company would retain 30% and grow its balance sheet.
Geothermal generation accounts for 29% of Kenya’s installed capacity, with around 820 MW in 2019.