Olkaria PPP Investor Conference 140MW PPP Geothermal ... · Olkaria PPP Investor Conference 140MW...

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Olkaria PPP Investor Conference 140MW PPP Geothermal Project 27 th November, 2019 Request for Qualifications Stage PRESENTATION BY: REBECCA MAINO MANAGING DIRECTOR & CEO, KenGen

Transcript of Olkaria PPP Investor Conference 140MW PPP Geothermal ... · Olkaria PPP Investor Conference 140MW...

Page 1: Olkaria PPP Investor Conference 140MW PPP Geothermal ... · Olkaria PPP Investor Conference 140MW PPP Geothermal Project 27th November, 2019 Request for Qualifications Stage PRESENTATION

Olkaria PPP Investor Conference140MW PPP Geothermal Project27th November, 2019

Request for Qualifications Stage

PRESENTATION BY: REBECCA MAINO

MANAGING DIRECTOR & CEO, KenGen

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Contents

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2

1. Sector Institutional Framework

2. Introduction to KenGen

3. Project Overview

4. Procurement process

5. Schedule

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KENYA POWER SECTOR INSTITUTIONAL FRAMEWORK

TRANSMISSION

REGULATION

POLICY / GUIDANCE

DISTRIBUTION

IPPs

GENERATION / EXPLORATION

National Installed Capacity: 2,898MW

~62%installed

share

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NATIONAL INSTALLED CAPACITY & GENERATION MIX

28.51%Hydro

29.29%Geo

27.88%Thermal

0.97%Cogentn

1.76%Solar

11.60%Wind

Installed Capacity (MW) October 2019

Hydro32.55%

Geothermal43.79%

Thermal11.29%

Cogeneration0.00%

Solar0.52%

Wind10.37%

Imports1.48%

Generation Mix 2018/19

Hydro Geothermal Thermal Cogeneration Solar Wind Total

826.2MW 848.7MW 808.1MW 28.0MW 50.9MW 336.1MW 2,898.0

Includes Off-grids

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INSTALLED CAPACITY – KEY PLAYERS

KenGen 62%

REREC2%

IPPs36%

KenGen REREC IPPS Total-MW

1795.6MW 50.0MW 1052.4MW 2898.0MW

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KenGen: Overview- who we are

OUR

STRENGTH:

• We are now in our 65th Anniversary

• 70% Govt. (30% public: 6.594 bln shares issued)

• Our Motto: ENERGY FOR THE NATION.

1,795 MW (~75% sales market share)

Mission: …to efficiently generate competitively priced

electric energy…

Vision: … to be the market leader in the provision of

reliable, safe, quality and competitively priced electric

energy…

Values: … Team Spirit; Integrity; Professionalism &

Safety

Skilled Staff: ~2,500

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KenGen: Overview- Our Installed Capacity

50%

46%

33% 39%

15% 14%

690MW

818MW

100%

2018

Wind

2019

Hydro

2% 1%

Geothermal

Diesel & Gas

KenGen Energy Mix

with Olkaria V

new addition

253MW

25.5MW

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2014

1,2451,187 1,213

1,6301,617 1,631

2018

1,009

2013

2019

2010

1,6312011

2012

2015

2016

2017

1,796

1,187

2009

1,409

+165.4 MW expected

later this year (Olkaria

V)MW

KenGen: Overview-Our Consistent growth

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KenGen: Overview-our Asset Base-Kes Billion

103

151 161 163189

250

343367 377 379

2014

2010

2009

2013

2016

2018

2011

2012

2015

2017

+266%

16%

Balance Sheet as at 31st Dec. 2018

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GOOD-TO-GREAT JOURNEY

Good

Company

Great

Company

Time

10 years+ (> 2025)

Horizon III

Explore expansion

opportunities

• Drive expansion

beyond Kenya

• Establish a strong

African footprint

• Leader in technology

and innovation

Horizon I

2008-12

Horizon II

2016-25

Stabilise power

situation in Kenya

• Delivered 325+MW

• Increased RoE to

12.5%

• Drilled 150+

geothermal wells

Revamped plan

Create sustainable

power growth in Kenya

• Deliver 2,500MW

• Create value for our

shareholders

• Lower tariffs

• Diversify business

• Build capabilities

for our future

Base Plan

2013-15

Delivered

375+MW

~900MW 1631M

W

Scaling up!

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KenGen: ISO CERTIFIED COMPANY

Good-to-Great

PIBO / Rights Issue

Pilot Wellheads

Innovative Finance

Geothermal Spa

280MW plant

Energy Park

(planned)

83MW of early

generation; prudent

geothermal

reservoir

management and

sustainability

SPV / PPP; profit

retention; reducing

reliance on

Government

support

Big Four agenda

driver;

competitively

priced electricity,

steam, water, etc.

to industries /

manufacturers

2 conventional

plants each with

twin 70MW units;

largest single

geothermal project

globally

Largest in

Africa; prime

tourist

attraction

KShs. 25B Public

Infrastructure Bond (2009);

KShs. 26B Rights Issue (2016)

GOOD-TO-GREAT JOURNEY

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DRILLING PERFORMANCE- WE DO THIS VERY WELL

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GEOTHERMAL – ……AND DEVELOPMENT AND OPERATION TOO!

OUR GEOTHERMAL GROWTH PATH

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GEOTHERMAL – ……WE KEEP IMPROVING

OUR GEOTHERMAL EXPERTISE

CENTRE OF EXCELLENCE

POWER PLANT OPERATIONS &

MAINTENANCE SERVICES

WELL TESTING SERVICES

DEEP DRILLING SERVICES

GEOTECHNICAL SERVICES

• Ethiopia, • Djibouti

• Rwanda • Sudan

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3653

1948

1868

1347

1005

951

944

849

755

549

0 500 1000 1500 2000 2500 3000 3500 4000

United States

Indonesia

Philiphines

Turkey

New zealand

Mexico

Italy

Kenya

Iceland

Japan

GEOTHERMAL – AND WE ARE ON THE GLOBAL MAP

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THE OLKARIA PPP PROJECT

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GEOTHERMAL POTENTIAL - KENYA

Oo

2oS

38oE36oE

North Island

L. Turkana

Central Island

South Island

Barrier Volcano

Emuruangogolak

Silale

Paka KKKKKKEEEEEENNNNNNYYYYYYAAAAAA

Nyambeni

Mt. Kenya

Mozambiquemetamorphic

belt

Longonot

Nairobi

Olorgesaille

Shombole

ChyuluOl'Doinyo Lengai

0 50 100 150

Kilometers

Basalt-Trachyte-Rhyolite centers

Nephelinitic centers

Alkaline centers

Lakes

Rift Faults

Kilimanjaro

TANZANIA

Cenozoicvolcanics

Mesozoicsediments

Suswa

Olkaria

Eburru

Menengai

Ol'Esakut

UGANDA

Huri

Korosi

Kisumu

ETHIOPIA4oN

38oE

Mt. Elgon

L. Magadi

Homa Hills

Geothermal Prospects

Geothermal Fields

L. Naivasha

Arus-Bogoria

L. Baringo

Namarunu

Rift Region Potential (MW)Central Rift

Menengai 1,600MW

Eburru 250MW

Arus Bogoria 400MW

2,250MW

South Rift

Olkaria 2,000MW

Longonot 750MW

Suswa 600MW

Lake Magadi 100MW

3,450MW

North Rift

Lake Baringo 200MW

Korosi 450MW

Paka 500MW

Silali 1,200MW

Emuruangogolak 650MW

Namarunu 400MW

Barrier 450MW

3,850MW

Nyanza

Homa hills 100MW

Akira 350MW

450MW

Total Potential 10,000MW

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OLKARIA PPP PROJECT OVERVIEW

Olkaria Geothermal Field

• The Olkaria geothermal field is in Naivasha,

approximately 120 km northwest of Nairobi

• The entire Olkaria volcanic field covers an area of

approximately 240 km2 and is situated at an

elevation ranging between 1,900 and 2,200 masl.

• The project wells have been pre-drilled to support

the target plant capacity plus a buffer

Olkaria PPP Project Site

• The project area is in the northeastern sector of

the Olkaria geothermal field

• The power plant location is next to the existing

Olkaria II power station

• Grid connection via a ~3.75km line to the Olkaria 1

AU

• The land required for the Project is leased by

KenGen from the Kenya Wildlife Service and will

be made available to the Project Company via

sub-lease

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OUR PPP JOURNEY

2012

Project approved as a National Priority Project for development as PPP

2015

Procurement of the Transaction Advisors

2019 April

Approval of the Project Feasibility Study

November

2019 Commencement of the Procurement for a developer –Issue of the RFQ

Our Advisors

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OLKARIA PPP PROJECT

Opportunity to enter a growing electricity market in one of the fastest growing economies in Sub-

Saharan Africa1

Strong development partner in KenGen (25% equity investment)2

Build-Own-Operate-Transfer (BOOT) opportunity 3

Location adjacent to proven geothermal resource and available interconnection4

KenGen Providing Project site, equity, and long term steam supply5

Long-term PPA providing stable revenue stream6

Positive social and environmental impact7

Opportunity to enter a dynamic and growing energy sector with a greenfield

renewable power project supported by a proven geothermal resource and strong project partner

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Olkaria Project Overview

First PPP project developed by KenGen under the PPP Act 2013

KenGen owns and operates 5 geothermal plants and 14 wellhead units with a total combined capacity of about 685MW. Construction of a 70MW unit is in progress

Size

PPP type

Procurement

Offtaker

PPA duration

~140 MW

Build, Own, Operate, Transfer (BOOT)

Step 1 Request for QualificationStep 2 Request for Proposal

Kenya Power

25 years, and transfer to KenGen at peppercorn at the end of the PPA term

Steam Supplier KenGen (25 years)

Location 120 km northwest of Nairobi

COD date ~3 years from financial close

OwnershipSpecial Purpose Vehicle (SPV)-25% shareholding by KenGen

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Design, Finance, Construction, Operation and Maintenance of

140MW Geothermal Power Project

Design, Finance, Construction, Operation and Maintenance of above

ground steam gathering system(O&M contracted to KenGen)

Design, Finance, Construction, Operation and Maintenance of about

3.75km transmission line from the Project to Olkaria I Unit 4&5

substation and the associated infrastructure(Transferred to

KP/KETRACO upon commissioning)

Purchase of steam from KenGen via a 25 steam sale agreement

Sale of electricity to the Kenya Power via a 25 year Power Purchase

Agreement

Transfer of the plant back to KenGen after 25 years at peppercorn

The Olkaria PPP Project Description

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2323

PPP PROJECT COMPONENTS/SHARE OF RESPONSIBILITY

BETWEEN KenGen-PRIVATE SECTOR

Power Plant Interconnection SAGS Wells & wells Civil

Works

Finance SPV SPV SPV KenGen

Construct SPV SPV SPV KenGen

Operate SPV KPLC/KETRACO KenGen KenGen

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PPP Contract Structure: Steam Supply Agreement + PPA

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SPV

Lenders

Sponsors

Shareholder’s Agreements

Loan Agreements

Project & Steam Supply Agreement

Power Purchase Agreement

Structure is consistent with previous IPPs and market expectations.

Tra

nsf

er to

Ke

nG

en

a

t e

nd

of

PP

A

SPV scope does not include steamfield assets.

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FLUID RECOVERY/RESERVOIR SUSTAINABILITY CHALLENGE

•We need to ensure sustainability of the reservoir by

maximizing the geothermal fluid recovery and re-

injection rate

•Current fluid recovery rate is between 40%-65% using

evaporative wet cooling towers

•100% fluid recovery is desired around

•We believe it is possible, and the solutions

many

Can the private

sector come up

with solutions

please?

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PROCUREMENT SCHEDULE

• Prospective bidders will be qualified through the RFQ process

• Investors Conference to be held on November 27, 2019

• RFQ submission deadline: January 22, 2020

• Deadline for bidder clarification questions: [January 7, 2020]

Phase 1: Request for Qualification

• Firms / consortia qualified through the RFQ process will be invited to submit

proposals pursuant to a Request for Proposals to be issued by KenGen

• A mandatory pre-bid conference and site visit will be held approximately 6 weeks

after issuance of the RFP to qualified bidders

• Qualified bidders shall be given an opportunity to send written questions or

clarification requests to KenGen up until a deadline that will be no later than 30

Days prior to the bid submission deadline set forth in the RFP.

Phase 2: Request for Proposal

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ESTIMATED TENDER PROCESS SCHEDULE

Procurement Process Stage Estimated Date

RFQ Announcement November 2019

RFQ Issuance November 2019

RFQ Submission Deadline December 2019

Qualified Bidder Announcement January 2019

RFP Issuance February 2019

Pre-Bid Conference March 2020

RFP Proposal Deadline June 2020

Selection of Preferred Bidder August 2020

Finalization of Project Agreements November 2020

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THANK YOU!