KenGen seeks Geothermal deals in Tanzania

In what appears to solidify the Kenyan electricity producer’s position as the top geothermal power company on the continent, KenGen is eyeing drilling deals in Tanzania.

According to KenGen’s acting managing director Abraham Serem, the company is awaiting a response from the Tanzanian government for two projects, the value of which is still unknown.

The addition of a project in Tanzania to those already underway in Ethiopia, Djibouti, and Rwanda solidifies KenGen’s rapidly expanding position as the industry leader in geothermal well exploration and drilling.

As part of its strategy for revenue diversification, the company has been actively seeking out opportunities to offer its geothermal services.

“We have responded to expressions of interest for two from Tanzania and we are waiting for their response. Some are for studies and others for drilling,” said Mr Serem.

KenGen is eager to capitalize on these opportunities and increase revenue because the government, led by President Samia Suluhu, has already chosen the region around Lake Ngozi as a pilot for geothermal power production.

In November of last year, the Tanzania Geothermal Development Company published a tender for the drilling and testing of wells in the area.

The country plans to begin producing geothermal energy before 2025 and believes that it has a geothermal potential of 5,000 megawatts.

In the past four years, drilling projects in Ethiopia and Djibouti have brought in billions for KenGen, which is owned by the Kenyan government to the tune of 70%, significantly bolstering its financial position.

Since 2019, the company has been awarded contracts to drill wells and provide consulting services in Ethiopia and Djibouti, totalling an estimated Sh14 billion.

The Sh709 million ($6.5 million) contract to drill three geothermal wells in Djibouti was KenGen’s most recent agreement outside of Kenya.

The Djibouti contract came two years after the company was awarded two contracts for consulting and drilling wells in Ethiopia, totalling approximately Sh13.4 billion.

In order to drill geothermal wells that would be subject to the results of the geoscientific studies, the power producer has also been trying to collaborate with the governments of Rwanda and the DR Congo.

At least half of the electricity in the national grid is generated by KenGen, primarily due to its extensive geothermal production in the Olkaria region.

With an installed capacity of 863 megawatts, Kenya is among the top 10 producers of geothermal energy worldwide and the top producer in Africa. KenGen provides 713 megawatts of contribution.

The company places Kenya’s geothermal potential along the Rift Valley belt at 10,000 Megawatts.

Kenya is eighth in the world for geothermal energy production, demonstrating the value of KenGen in utilizing renewable energy.

The company places Kenya’s geothermal potential along the Rift Valley belt at 10,000 Megawatts.

Kenya is eighth in the world for geothermal energy production, demonstrating the value of KenGen in utilizing renewable energy.