Posted with permission from ESG Impact Zone.

NAIROBI, Kenya - Power producer KenGen has secured first-refusal rights on geothermal wells drilled by the Geothermal Development Company (GDC), opening the way for the generator to set up new plants away from its Olkaria base.

The two State-owned companies signed a memorandum of understanding last year which will see KenGen given the first opportunity for utilisation of GDC's existing and new geothermal wells, where it has the option of putting up power plants, wellheads or any other direct use of the steam.

A right of refusal means that GDC will only be able to go to other independent power producers after KenGen confirms it would not bid for the wells.

GDC has been drilling prospecting wells at the Menengai site in Nakuru and Silali in Baringo and has previously developed wells in the Olkaria basin from where it sells steam to KenGen.

KenGen managing director Abraham Serem told the Business Daily last week that the two companies have lined up a meeting to work out the finer details of the new steam purchase agreement