Djibouti contracts Kenyan firm to drill geothermal wells

26th February 2021 By: John Muchira - Creamer Media Correspondent

Djibouti has contracted Kenya Electricity Generating Company (KenGen) to drill three geothermal wells as the country moves to exploit the resource to increase electricity access.

The $6.5-million contract, signed by the Djibouti Office of Geothermal Energy Development and KenGen, will involve the drilling of wells in the Lake Assal region, where exploration activities have been ongoing for some time.

Since 2013, the African Development Bank has advanced loans totalling $24.7-million to Djibouti to finance geothermal exploitation activities in the country, where the potential for geothermal power is estimated at 1 000 MW.

KenGen MD Rebecca Miano says the contract will see Djibouti benefit from the company’s experience and expertise, having drilled more than 300 wells in Kenya and having executed a similar project in Ethiopia.

“It is worth noting that we are not only keen on increasing our presence in Africa, but also enhancing energy capacities across the region,” she says.

Djibouti, with a population of about one-million, solely relies on thermal power, with an installed capacity of only 126 MW, despite being endowed with abundant solar, wind and geothermal resources.

Only 54% of the country’s urban population and 2% of its rural population have access to electricity. The Horn of Africa nation is targeting universal access to clean energy by 2035.

KenGen’s entry into Djibouti is in line with its diversification strategy, in terms of which it aims to leverage its expertise in geothermal energy, offering commercial drilling services, geothermal consulting and other energy- related services across Africa.

The Djibouti contract is the latest geothermal drilling contract the company has won in Africa. KenGen secured a $52.8-million contract to drill 12 wells in Ethiopia in 2019.

The Kenyan State-owned company is eyeing similar deals in Uganda, Tanzania, Rwanda, South Sudan, Sudan, Zambia and Comoros, all of which lie within the geothermal-rich Rift Valley.