CONFIDENTIAL

Kenya’s Geothermal Journey

Albert Mugo, MD & CEO, KenGen

26 February 2015, Kenya

Disclaimer: No part of this report may be circulated, quoted, or reproduced for distribution without prior written approval from KenGen. All the information contained herein was prepared for information to the German Parliamentarians visiting Kenya OUTLINE:

1 Preamble – Geothermal Potential in Africa and Kenya

2 Kenya’s Geothermal Journey

3 Discussion

1 1 Huge Geothermal Potential in Africa but very little has been tapped… >20,000MW potential

1 Kenya> 10,000MW 2 Ethiopia>5,000MW 3 Rwanda>700MW 4 Tanzania > 650MW 5 Uganda > 450MW 6 DRC - ? Kenya 7 Comoros - ? 8 Zambia - ? 9 Malawi - ? 10 Mozambique - ? 11 Djibouti - ? 12 Eritrea - ? 13 Burundi - ? 14 Sudan - ?

Source: TMO; Internet Sources; Argeo 2 1 Kenya’s Geothermal Potential 10 GW in over 23 sites…

> 10,000MW in over 23 sites

• Suswa, • Longonot, • Olkaria, • Eburru, • Menengai, • Arus-Bogoria, • Lake Baringo, Menengai Block (1,600MW) • Korosi, (Drilling Ongoing) • Paka, 90MWe tender awarded • Lake Magadi, to private developers • Badlands, Olkaria Block(1,200MW) • Silali, (i)Developing 350MW • Emuruangogolak, (ii) Drilling for 560MW • Namarunu (the first 324MWe commissioned) • Barrier • Mwananyamala Private developers • Homa Hills already licensed at Olkaria, Akiira and • Nyambene Ridges Longonot fields • Chyulu Hills

Source: TMO; Internet Sources; Argeo 3 OUTLINE:

1 Preamble – Geothermal Potential in Africa and Kenya

2 Kenya’s Geothermal Journey

3 Discussion

4 3 GEOTHERMAL: DEVELOPMENT IN KENYA TO-DATE

1956-59 1967-70 1971-76 1976-85 1986-98 1999-2006

• Two • GoK & UNDP • Decision was • Drilling was • Drilling • Exploratory/ Exploratory entered into taken to accelerated continued in Discovery wells drilled an concentrate and about Olkaria II wells drilled to a depth of agreement to Geothermal 23 wells Steam field ~ in 1999 in ~950m extensively Development drilled 30 wells Olkaria IV undertake at Olkaria area drilled by field geothermal (~80km2). • 45 MW 1992 resource (Olkaria I) • Production assessment commission • From 1992, drilling & • Six wells ed between financiers commissioning were drilled 1981-1985 pulled out Olkaria II 70MW with positive and no major in 2003 results. works • Most undertaken • Thro’ GoK This decision financing until 1999 funding, was the was from appraisal turning point Concession drilling in Geothermal World • Development Bank given to started in in Kenya … Orpower 4 in 2006 Olkaria III field in 1998

Source: TMO; BDS Division 5 23 GEOTHERMAL: DEVELOPMENT IN KENYA TO-DATE (Cont.)

2007 - date About US$ 1,065 million have been committed by DFIs in Olkaria Field

• Production drilling Olk. I Olk. II Olk. I 3rd Unit Olk. I&IV started in Olkaria I&IV 45MW 70MW (35MW) (280MW) (about 57 wells drilled [1981-85] [2003] [2010] [2014] Total with over ~ 370MW IDA (US$ 'm) 118 108 29 120 375 capped) EIB (US$ 'm) 8.8 39 50 108 205.8 • Olkaria II 3rd Unit KfW (US$ 'm) 11 12 - 99 122 35MW commissioned CDC(£ 'm) 15.5 - - - 15.5 AfD (US$ 'm) - - 28 118 146 • Olkaria I & IV JICA (US$ 'm) - - - 201 201 280MW - 2014

Current total Geothermal Capacity for • Over ~US$1,065m committed by development Kenya is ~ partners over the years in Olkaria 579MW

Source: SBP; BD Division 6 2 KENYA GEOTHERMAL: MILESTONES OVER THE YEARS

Milestones

Olkaria II unit 3 – 35MW Pilot Wellhead – 5MW Olkaria I & IV – 280MW Wellheads – 40MW Olkaria I - 45MW Olkaria II – 70MW Oserian – 2MW Orpower III – 61MW

1985 2003 2010 2012 2014

1998 2009 2011 2013 Eburru – 2.5MW Orpower I –13MW Orpower II – 36MW Commencement of Olkaria I&IV 280MW WellHeads 75MW

7 3 KENYA’S POSITION IN THE GEOTHERMAL DEVELOPMENT GLOBALLY 3,389

• World Geothermal Installed Capacity ~ 12,239MWe Kenya is 9th with ~ 579MWe (4.7%) 1,894

1,333

980 901 895 664 579 537

208 204 163 104 97 56 42 28 27 15 13 8 1 1 0 Italy USA China Japan Kenya Turkey Russia France Austria Mexico Iceland Ethiopia Portugal Thailand Australia Germany Indonesia Nicaragua Philippines Guatemala Costa Rica El Salvador New Zealand

Source: TMO; http://en.wikipedia.org/wiki/Geothermal_electricity Papua New Guinea 8 3 KENYA’S GEOTHERMAL JOURNEY FROM 1956 to DATE

240

220

+126%

Little activity for ~15yrs. 172 No funding for geothermal. 162 144 128 103 114 106 99 100101 94 96 87 91 79 67 59 50 41 46 36 27 31 21 24 15 9 11 3 4 7 2011 1996 1997 1998 1999 2007 2008 2009 2013 2010 2012 1981 1982 1983 1984 1985 1986 1987 1988 1988 1990 1991 1992 1993 1994 2014 1956 1973 1974 1975 1978 1979 1980 4

Source: KenGen 9 3 GOVERNMENT DRILLING COMMITMENTS OVER THE YEARS

1,278

170

200

US$ ‘m

380 GoK has committed over US$ 1.2bln to mitigate 200 drilling risk 10 160

45 33 80

Source:KenGen, TMO 2004 2005 20062008 2010 2011 2012 2013 2014 Total 10 ESTIMATED INVESTMENT IN GEOTHERMAL BY 2030

US$ million 17,615

5,480 Approximately US$ 18billion required to develop the projected 5GW of geothermal by 2030 2,810

6,600

585 500 685 955

Total Drilling Steam Power Substation Consul- Admin- Interest Field Plant & tancy stration During Transmission Construction

Source: KenGen; 11 Thank You

12