How graft slows down Kenya’s dream of cheap electricity

How graft slows down Kenya’s dream of cheap electricity

Plans to accelerate development of geothermal resources have failed to achieve the desired results, with a state parastatal established to steer the efforts set to deliver its first project late next year, over 10 years since its establishment.

Despite geothermal being described as the greatest gift from God to the energy industry, for Kenya, the desire to utilise the abundant resource to generate cheap electricity has been crippled by individuals who turned the Geothermal Development Company (GDC) to a den of looting, mismanagement and nepotism.

For GDC managing director Johnson ole Nchoe, the past two years have largely been of cleaning the mess left behind by previous top managers — most of whom were hounded out of office in 2016 and arraigned corruption-related cases — and getting the geothermal programme back on track.

“We are fast-tracking the geothermal agenda to ensure Kenyans benefit from cheap electricity,” Eng Nchoe told the Nation.


The mess at GDC had run deep and wide, with the company having been among the top notorious state entities in failing to pay suppliers considering that in 2016, its pending bills stood at a staggering Sh6 billion.

Auditor-General reports also show that in 2015, GDC failed to pay corporate income tax amounting to Sh1.4 billion, attracting a Sh405.6 million penalty.

This is despite the fact that since its establishment in 2008, GDC has been among the well-funded state companies, receiving on average Sh7 billion from the National Treasury annually.

The company generates an extra Sh3.5 billion from steam sales per year.

Notably, about 80 per cent of funds that the company receive from Treasury constitute concessional loans from development partners, money that the country must repay with interest.

This week, Eng Nchoe told the National Assembly committee on Energy that GDC has managed to settle most of its financial obligations, reducing the pending bills to Sh1.3 billion. POWER PRODUCTION While the pending bills are an illustration of the level of ineptness that had engulfed the company, failure in its core mandate of accelerating geothermal development is among the factors that are forcing Kenyans to pay exorbitantly for electricity.More than 10 years after its establishment, GDC is set to deliver its first project in late 2019.Granted, delivering electricity from geothermal is a complex and capital intensive endeavour that involves four critical stages of proper planning and ascertaining availability of steam, painstaking infrastructure development, drilling and finally generation.It is important to understand that geothermal […]

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