KenGen faces geothermal fields buyout challenge

Kenya’s largest energy generator, KenGen, is running out of geothermal fields as Independent Power Producers (IPP) buy up a significant portion of the land, mostly in the Naivasha and Narok region.

The decision to lease the property to private businesses has been criticized as posing a serious threat to the nation’s ability to produce electricity at a time when demand is rising. The most severely impacted regions are the geothermal-rich regions of Olkaria and Suswa, where numerous private businesses have purchased significant land blocks without conducting any exploration.

The administration voiced its concerns during a meeting with the parliamentary energy committee in Naivasha, saying that attempting to obtain a concession for the geothermal fields could result in drawn-out legal battles.

David Chirchir, the energy cabinet secretary, acknowledged that private corporations managed a sizable portion of the geothermal resources. According to him, some of the corporations bought the land more than ten years ago, but due to the exorbitant costs involved, no research had been done.

The CS stated that there was need to look for ways to reclaim the geothermal fields, which are currently under the Independent Power Producers.

Ken Aramat, vice-chair of the committee, claimed that the IPPs’ acquisition of substantial amounts of land in the area has limited KenGen’s ability to grow. The majority of the geothermal resources in Olkaria, Longonot, and Suswa are held by private enterprises, thus preventing KenGen from expanding, according to him. He warned that the energy sector would suffer in the future as some of the businesses were merely holding onto the land for speculative reasons.

According to the committee’s chairman Vincent Kawaya, geothermal energy, which is more dependable and environmentally friendly than solar and hydropower, has a great potential in Kenya.

In the coming years, as power demand increases, he added, failing to recover the leased geothermal fields could have negative implications. Although we are aware that geothermal drilling is expensive, he added, “We are wondering why an investor would seek hundreds of acres in the geothermal fields and fail to explore energy for years.