30 October
Power Purchase Agreement Signed
PPA has been signed
Energy and Petroleum
Nakuru
Post-procurement
Geothermal Development Company (GDC)
21-04-2020 08:45:18
Energy infrastructure is a vital input to socio-economic development, which contributes to the pace of economic growth in any country. Kenya has identified the energy sector as a key enabler for achieving its national development blueprint, “Vision 2030.” Vision 2030 calls for the energy sector to provide affordable, sustainable, and reliable electricity supply to stimulate high and sustained economic growth, in turn leading to higher incomes, increased employment, and reduced poverty for the country. To achieve the goals in Vision 2030, Kenya plans to increase electricity access from 55% today, to 100% by 2020. Additional generation capacity will be an important part of delivering universal access with high reliability. The project is expected to be a cost-effective and environmentally sound option for meeting Kenya’s energy needs and utilizing Kenya’s substantial endowment of geothermal resources.
The project involves the design finance, construction installation, operation and maintenance of a 35 MW modular geothermal power plant on a Build own operate basis.
Utilizing the private sector capability in the delivery of such public infrastructure will result in the achievement and maintenance of a balanced risk return structure, thereby providing effective services. As the private sector is known to possess good mobility, this will offer cost savings to the projects aspects such as planning, design, construction and eventually the operation. The private sector participation in the provision of this infrastructure will relieve the government of the need to budget up front to develop this infrastructure
TA yet to be appointed.
Not Applicable
Please find summary document attached
30 October
PPA has been signed
The financing parties will be updated once the project achieves financial close.
The project will be financed through a combination of Debt and equity, the rations of which will be finalised once negotiations towards financial close are complete.
| Type of risk | Description | Allocation | Mitigation |
|---|---|---|---|
| Availability Capacity | The private party is required to generate electricity at the agreed upon levels through out the concession term. | Private Sector | Failure to do so results in payment deductions |
| Development of Steam wells and Steam Availability | The public party is required to ensure the agreed upon steam is available throughout the concession period to enable the private party generate power. | Public Sector | Unavailability of steam |
| Financing | The private party is responsible obtaining the funds to the develop and maintain the plant | Private Sector | Project will not commence if the private party is unable to reach financial close. |
| Design and Construction | Responsible for designing and constructing the plant and any cost and time overruns during construction. | Private Sector | Output specifications will be shared with the private party to ensure that the plant meets the relevant standards. The Independent Engineer will also be required to certify the works done prior to issuing a clearance certificate. |
| Tariff restructuring | If GOK policy changes and negatively affects the private party, the party would need to be compensated | Public Sector | All material restructurings needs to be made known to the private party to enable them undertake the necessary assessment to determine if they will be adversely affected. |
| Transmission line failure | This refers to the off take system that should be in place to ensure that he electricity generated can be connected to the grid in a timely manner. | Public Sector | The Public sector is required to ensure that the lines are in place and adequate to off take the electricity that will be generated before the commissioning of the plant |
| Land | Land for the project is to be made available by the Public Sector | Public Sector | Land is one of the Conditions precedent to Financial Close and the land should be handed over free of any encumbrances. |
| Operations and maintenance | The private party is required to operate and maintain the plant in accordance with the set performance standards | Private Sector | A planned maintenance programme is to be prepared by the private party and approved by the public entity |
| Deemed generated energy | If the government failure results in failure to dispatch electricity, GOK/Public sector will bear the risk. | Public Sector | Public sector to ensure that the Transmission lines are in place and there is adequate capacity to off take the power generated. |
| Environmental Concerns | This relates to all the environmental risks related to the project. | Private Sector | The Private party is required to undertake all legally required environmental studies at its own cost and submit these as a condition precedent to Financial Close. |
| Letter of Support |
A letter of support was issued for the project |
| Events of Default | Brief description | Termination Payments | Documents |
|---|---|---|---|
| Sosian Energy | o Continuing breach by KPLC of its material obligations under the PPA o Failure by KPLC to pay any amount due, within the stated period under the PPA o Repudiation of the agreement or any material clause in the Agreement o Incorrect representations and warranties made by the private party in relation to a material event | . |
Information will be published as soon as it is available.
Information will be published as soon as it is available.
Information will be published as soon as it is available.
Information will be published as soon as it is available.
