Kenya has historically relied on hydropower for the bulk of its power generation. But during times of drought, when hydropower drops in supply, Kenya has had to turn to costly emergency dieselfired plants.

To avoid this, the government wanted to develop a series of thermal and renewable IPPs to replace the expensive, diesel-fired rental power plants currently in use. It is envisioned that subsequent IPPs will use only low-carbon resources such as geothermal and wind, and the thermal plants will transition to peak-load operation.

The first IPP to be implemented under the program was the Thika Power Project. The Thika project is a result of the Kenyan government’s 2009 tender of three power plants, to encourage private sector participation in electricity supply.

The project consists of the construction (on a build, own, and operate basis) of an 87 MW heavy fuel oil plant located at Thika, approximately 35 kilometers from Nairobi. Melec PowerGen Inc. (an affiliate of the Matelec Group of Companies from Lebanon ) was awarded the contract following a competitive bidding process. The total project cost is estimated at $153 million.

Thika has entered into a 20-year power purchase agreement with Kenya Power, to which it will sell all its output. Heavy fuel oil plants offer a viable and lower cost alternative than diesel-fired plants to address the short-term energy deficit in Kenya, given the relatively long development period of other sources like geothermal energy and coal.

Over time, as more renewable energy plants come online, the heavy fuel plants are expected to transition from base to peak-load operation.