Kengen, in partnership with China’s Shandong Kerui Group has secured a multi-million deal to supply geothermal drilling services to State-run Ethiopian Electric Power.
The World Bank funded project will see the implementation of drilling rigs and accessories as well as rig operation and maintenance for drilling geothermal wells at Aluto, Ethiopia to a tune of ($76.8 million) Sh7.6 billion.
The contract was awarded in December after the consortium of the two firms’ bid for the Egyptian project.
“As we extend our services to Ethiopia, we are leveraging on our expertise, in depth knowledge of the African Rift Valley and close to four decades of successful drilling experience,” KenGen managing director Rebecca Miano said.
During the contract signing ceremony, Ethiopian Electric Power CEO Abraham Belay said Ethiopia had tried to venture into geothermal development in efforts dating as far back as 1981 but was yet to make a commercial breakthrough.
“Currently, we have some geothermal drilling rigs that are idle and now broken down and therefore the need to purchase new ones,” he said.
The project will be implemented in two phases, phase I which is purchase of drilling rigs and Phase II which entails provision of drilling services.
KenGen will supply about 30 per cent of the component of Phase II which translates to about $6.2 million (Sh620 million).
Kenya is Africa’s number one geothermal energy producer and among top 10 in the world.
The country has a geothermal installed capacity of 685MW with an estimated potential of 10,000MW along the Rift Valley. This potential is being harnessed in Olkaria, Menegai and Eburru fields.
Kengen registered a six per cent growth in revenue earned from its geothermal power plants to Sh17.1 billion for the half year ending in December 31 compared to Sh16.1 billion registered the previous year.
The firm’s net profit for the review period grew to Sh4.12 billion compared to Sh4.1 billion recorded over the same period in 2017.