Chinese-funded geothermal power plant hastening Kenya's clean energy switch

Kenya’s economic growth, which is one of the fastest in Africa, has led to an increase in demand for electricity. The Energy and Petroleum Regulatory Authority reveals that peak demand for electricity in Kenya has been growing by an average of 3.1 percent annually and now exceeds 2,000 megawatts (MW). Approximately 25 percent of the country’s population still lacks access to electricity, partly due to power supply disruptions caused by drought and the high cost of maintaining diesel-fired power plants. To tackle this issue, the government plans to replace diesel-fired power generation by drilling geothermal wells in Kenya’s Rift Valley.

Currently, geothermal power accounts for 39.15 percent of power installed in the national grid, making it the largest source, followed by hydropower at 26.47 percent by the end of 2022. President William Ruto stated during the Africa Energy Forum that the country aims to achieve a 100 percent clean energy transition by 2030. He highlighted that Kenya has 10,000 MW of untapped geothermal energy across 20 locations in the Rift Valley, which could meet the country’s electricity needs even during peak hours. Kenya’s development blueprint, Vision 2030, projects that geothermal power generation will reach 1,600 MW by 2030, contributing 60 percent of overall power generation.

The Menengai Geothermal Power Plant, located in Nakuru county, is set to play a significant role in Kenya’s clean energy transition. It is financed and constructed by a Chinese firm, with major civil works reported to be 98 percent complete. Once commissioned, the plant will supply 35 MW of electricity to the national grid. The exploration of geothermal power in the Menengai crater commenced in 2011 and resumed in 2021 with the involvement of Chinese financiers and contractors, including Kaishan Group.

The project manager at Kaishan Group, Guo Rui, explained that the company, through a contractual arrangement with Sosian Energy, mobilized funds and technology to exploit geothermal resources in Kenya. Kaishan’s equipment has significantly reduced the project’s implementation timeline and costs. The company has prioritized transferring skills to local technicians. Sosian Energy’s managing director, Venugopal Varanasi, emphasized the use of Kaishan technology to convert low-pressure geothermal steam into power, positioning the Menengai geothermal project as a model for blending Chinese capital and technology to promote clean energy access.

Chinese investment and modern technology can transform Kenya into a regional hub for geothermal generation and supply, notes Lin Juntao, a site engineer at PowerChina. PowerChina has been undertaking civil and installation works at the Menengai geothermal plant since January 2022. Lin highlights that the equipment supplied by Kaishan Group, including turbines, can generate power twice using high steam temperature, surpassing the capabilities of Japanese or European equipment.

Moses Kachumo, a project engineer at Geothermal Development Company, praised the Chinese for their flexible financing model and technical expertise in expediting the implementation of the Menengai Geothermal Power Plant. He noted that Kaishan Group’s technology maximizes generation of geothermal power from steam and hot water. There are plans to replicate this technology in other geothermal projects in the country. Sosian Energy has a 14-year contractual agreement with Kaishan Group to run and maintain the Menengai geothermal plant, with a subsequent handover to the Kenyan energy firm after recouping investments.

Sosian Energy has a 25-year power purchasing agreement with Kenya Power, where it will supply electricity generated from the Menengai geothermal plant.