KenGen Tuesday signed a contract with Sinclair Knight Merz Limited of New Zealand for the implementation of a 280-megawatt geothermal power project in Olkaria, Naivasha.

The project - comprising Olkaria I and Olkaria IV fields - is part of KenGen's fast-track projects and is the biggest geothermal power project in Kenya.

The implementation period is three years starting February 2010 with a target completion date of 2013.  

The consultancy will comprise technical design and preparation of the tender documents, pre-qualification of potential bidders, tender evaluation and contract negotiations, supervision of construction contracts and support during the warranty period.  

The scope of the project includes four 70MW power generating machines, steam gathering systems, substations, transmission lines and other infrastructure.

KenGen Managing Director, Eddy Njoroge and Darryl Judkins, SKM's Project Manager signed the contract on behalf of their organizations.

The project is estimated to cost more than USD 1.314 billion, which includes the cost of the power plant and drilling of the wells. 

It will be financed by the Government of Kenya, JICA, AFD, EIB, World Bank, KfW, and KenGen.

Consequently, KenGen has finalized the procurement process to fast-track purchase of two drilling rigs in its continuing effort to expand geothermal power generation.

The move follows the rejection of an appeal by one of the unsuccessful bidders who had taken the matter to the Public Procurement Appeals Board.

The procurement of the two rigs is part of the geothermal capacity expansion strategy. The rigs will be used to drill wells for the 280MW power plant.