The geothermal development Forum was held in Nairobi on 23rd and 25th May during which 215 participants attended and 50 presentations of various experiences in geothermal development in Kenya and elsewhere were made. The Forum was hosted by the Ministry of Energy and Petroleum assisted by the World Bank. The participants consisted of various stakeholders from both public and private developers, donors and local and international experts and government officials interested in the sector. The Forum was informed that there is a huge interest from the private sector to obtain greenfield licences in order to conduct their own exploration with the intention of proceeding to exploitation stage. This was contrary to a survey recently completed which indicated that many developers would prefer coming in when the initial exploration risk had been taken by the government.
Kenya has a huge potential of geothermal resources in excess of 10,000 MW. Initially the government followed a development strategy where it undertook to carry out exploration drilling and before releasing the projects to KenGen, a public generating company or to IPP ( for example OrPower 4) for further drilling and power station construction and operation. Later, the government issued three greenfield licenses which have taken a long time to develop as the investors find it difficult to raise exploration drilling funds. This slow progress made the government to create GDC with the responsibility of drilling for steam and sell the steam to IPPs when all the resource risk had been taken care of. This process is also taking too long presumably because GDC has to recruit young staff who would require a lot of training. Even though GDC has already entered into contracts with three IPPs to develop 105MW in their first field in Menengai, the financier are finding this arrangement risky and need government to guarantee the steam supply from GDC over the life to the contract. This requirement has created substantial delays in the construction of the power stations.
In moving forward, the Forum provided useful suggestions which will be used to formulate a new Geothermal Development Strategy which will address the preferred model(s), tariffs, land issues and other infrastructure concerns in order to be ready before the end of the year. It was emphasized that the communities are very important stakeholders to these indigenous resources and should equitably benefit from these indigenous resources while being environmentally protected.