The Rise of East Africa As An Alternative Energy Mecca
In late October at Olkaria, a town in the heart of Kenya’s Rift Valley, massive turbines roared for the first time and like the first cry of a baby, they signified a new birth of what was termed by the government as affordable energy.
This was the commissioning of the Olkaria IV project which also set a new record for the East African nation, making it home of the largest single geothermal plant in the world.
The plant will harness heat from the earth’s crust to generate some 140 megawatts.
But the Rift Valley, which runs from Ethiopia to Mozambique, is estimated to have some potential 15,000 megawatts and US energy firms are streaming to the region to sink their drills into a piece of the geothermal pie.
In the last few weeks, power companies from Nevada to New York have been cutting deals to put up power plant that are expected to generate millions in revenues.
Nevada-based Ormat Technology, Symbion Energy of Washington DC and the Civicon, a Kenyan engineering company, jointly signed a 25-year deal with the Kenyan government to develop 35 megawatts of power in Menengai, Rift Valley.
“This will be our fifth plant in Kenya and once it is operational, we will supply 145 MW to the Kenyan grid. Upon completion of the Menengai project, more households in Kenya will gain access to cost-effective and clean power from their nation’s geothermal resources,” Ormat Chief executive Isaac Angel told AFKInsider in an email interview.
A few weeks earlier Green Max Capital Advisors, a New York-based financial services firm that focuses on renewable energy bagged $950,000 for Akiira One, another geothermal power plant that is going to be put up in the same region.
The cash was from the US Overseas Private Investment Corporation (OPIC) Africa Clean Energy Facility (ACEF), which is part of President Obama’s Power Africa initiative.
In Tanzania, the government is putting up a $300 million geothermal plant in Lake Ngozi on the Mbeya region which is expected to up 5,000 megawatts on completion.
Other American firms that are also venturing into other renewable energy sources such as solar.
Astonfield, a US-Indian firm, specialising in energy says that the East African region is poised for investments in renewable energy.
The company has signed an agreement with the government of Mauritius to construct a 4 megawatt solar field on the island nation and the firm said that more investments in renewable energy sources are expected in the East Africa region.
“Renewable energy is the way forward and Mauritius has taken a bold step in reducing its dependency on fossil fuels, especially when you are such a small island and therefore more vulnerable to climate change. Also, since the country benefits from great solar resources throughout the year, it makes sense to make the most out of it,” Astonfield chief executive Ameet Shah, told AFKInsider.
In the past most energy projects were handled by the government due to the huge capital outlay and the high risks involved.But as political and economic stability increases and investors feel more comfortable, the private sector is coming in to take finance the mega alternative energy projects.
Local banks and finance companies are some of the players that are actively teaming up with players to also get a shot of making something from the multi-million deals.