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Key Factors That Enabled Geothermal Development in Kenya Kenya has been able to successfully develop 209 MW of geothermal generation and has successfully involved the private sector in the development of several of its power stations.89 The success of Kenya’s geothermal development can be attributed to the strong commitment from both the government and multilateral development banks. In particular, the following four factors were key for the successful development of Kenya’s resources: • The government invests in geothermal development—The Government of Kenya has expressed a strong commitment to the development of geothermal resources in its Vision 2030 and has played an active role in the development of geothermal resources. For Kenya’s earlier geothermal projects, KenGen, the government-owned generation company, developed the geothermal power stations with concessionary funding. Now the government is using private sector participation to develop its geothermal resources, but is still assuming the exploration and early development risks through the GDC. • Kenya’s legal framework for developing geothermal resources and IPPs is proven— Kenya has experience developing IPPs and geothermal resources, which shows the legal framework to be proven and effective. Specifically, the legal framework establishes clear rules for governing the development of geothermal resources and governing IPPs. The Geothermal Resources Act of 1982 clearly lays out who owns the country’s geothermal resources and establishes the process for granting license for exploring them. Kenya also has a well-established and tested framework that governs IPPs; Kenya has six IPPs that provide 22 percent of Kenya’s installed capacity.90 One key policy that facilitates the development of IPPs is the Feed-In-Tariffs Policy on Wind, Biomass, Small-Hydro, Geothermal, Biogas and Solar Resource Generated Electricity. This policy serves as the basis for the PPAs in Kenya, providing standard PPAs, guidelines for PPAs, and the value of the feed-in tariff based on the size and type of generation. 7.4 • Kenya uses a phased approach for project development—In Kenya, both geothermal fields and power stations have been developed using a phased approach. The best example of this approach is the Olkaria field, which has four power stations that were developed over the course of 25 years. The government is now working to add additional units on the existing power stations. The description of Olkaria III in Section 7.3 shows how Kenya used a phased approach for developing power stations. • Multilateral development banks have provided extensive support for geothermal development in Kenya—Multilateral development banks have provided extensive support for the development of geothermal resources in Kenya. In addition to providing technical assistance and support in exploring resources during the early phases of Kenya’s geothermal development, multilateral development banks have also provided financing for specific power stations. 89. Geothermal Development Company, “Who We Are,” accessed November 5, 2014, http://www.gdc.co.ke/index.php?option=com_content&view=article&id=139&Itemid=203. 90. The Kenya Power and Lighting Company Limited, “Annual Report 2012/2013.” 48PDF Image | Unlocking Geothermal Power Eastern Caribbean Powerhouse
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