KenGen Contracted to Drill Geothermal Wells in Djibouti

KenGen Signs Contract to Drill Three Geothermal Wells in Djibouti

It is my distinct pleasure to announce that KenGen signed a contract earlier this month to drill three new geothermal wells in Djibouti. The contract was signed with the Djiboutian Office of Geothermal Energy Development (ODDEG). As the third such international contract of this kind, it is a testament to the confidence that KenGen inspires in Africa and beyond. Through good planning, hard work, cultivating excellence, discipline, and dedication, Kenya currently ranks first in Africa and is one of the world’s top ten geothermal energy producers with an installed capacity of 706 megawatts.

Djibouti signed the 6.5-million-dollar (709m KES) contract with KenGen as part of its efforts to advance Vision 2035, an ambitious and comprehensive plan that was first unveiled in 2013 to provide the entire country with access to fully reliable electricity by the middle of the next decade. Djibouti’s goal, moreover, is to generate 100% of its electricity by 2035 from renewable energy sources. Doing so will allow Djibouti to claim the title of being the first African state and the seventh country worldwide that exclusively uses renewable energy.

Currently, Djibouti still imports from Ethiopia nearly two-thirds of the 100 megawatts it uses, an arrangement leaving it vulnerable to price fluctuations that can be dictated by the supplier. The remaining one-third of electricity that is generated domestically by Djibouti is produced from a range of wind, solar, biomass, and geothermal power plants, and it is not entirely reliable.

KenGen’s Role in Djibouti’s Larger Efforts

Djibouti has already begun to take other steps towards the full realization of Vision 2035. Construction began in 2018 on a new power plant in Lake Assal and, separately, a large solar farm is currently being constructed at an overall cost of USD 390 million. The three geothermal wells that KenGen has been commissioned by ODDEG to drill will help move Djibouti significantly closer to its target. The prevailing professional assessment is that Djibouti ultimately will be able to generate annually as much as 300 megawatts of electricity using various renewable energy sources, provided it invests in the necessary infrastructure.

Indeed, part of the problem that Vision 2035 seeks to address is Djibouti’s current energy infrastructure, which suffers sorely from underdevelopment. Less than two-thirds of Djibouti’s citizens currently are connected to the national grid, and those citizens hail mainly from the urban centers. The extant infrastructure is incapable of delivering electricity to the remaining one-third of Djiboutians, who live primarily in the rural expanse, leaving roughly 110,000 households without the option of being hooked up to the national electricity grid. Furthermore, out of the 100 megawatts that are consumed by Djibouti, just over half (57 megawatts) are available to the citizenry and the country’s principal industries, precisely on account of the state of the infrastructure and the unreliable sources. A World Bank study found a clear correlation between access to reliable energy and the health, education, food security, gender equality, livelihoods, and poverty reduction of the local population.

Djibouti’s Role in KenGen’s Efforts

KenGen’s role in helping Djibouti achieve the goals it staked out in Vision 2035 is part of KenGen’s greater diversification strategy. This strategy is designed to serve the company’s overriding goal of providing a dependable and affordable supply of electricity to its customers across Kenya way while remaining profitable for its stockholders. At the same time, KenGen also prioritizes generating power amid reliance on environmentally conscientious and sustainability-oriented policies.

Part of KenGen’s diversification strategy has been to develop its capabilities and reputation as the preeminent expert in Africa on geothermal power, given the huge scope of its geothermal power plants, and to share that expertise with the continent. The contract with Djibouti was signed after KenGen was commissioned to drill 12 geothermal wells in Ethiopia and after providing professional consultancy work in Rwanda. In addition to contributing to the company’s own diversification, KenGen’s work in Ethiopia, Rwanda, and Djibouti comports with its strategic vision of supporting countries throughout Africa to help them enhance their own energy capacities, while concomitantly embracing sustainability-oriented policies that revolve in part around reliance on renewable energy. Doing so is good not only for KenGen and its stockholders, but also for the countries of Africa as well as for regional and global sustainability efforts. These are most certain to impact the near and distant future for the women, men, and children on this continent and around the world.