TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting and offers deep insights into Kenyan and global economic trends.

Kenyans will soon enjoy cheaper electricity costs when two independent power producers (IPPs) begin producing geothermal energy next year.

Eric Wamanji, the deputy manager for corporate communications and marketing at the Geothermal Development Company (GDC), revealed that Quantum Power East Africa's power generation facility is 60% complete, while OrPower 22 Power Company’s construction stands at 50% completion.

Wamanji confirmed that electricity produced by the multibillion-shilling Menengai Geothermal Project will cost at least KSh 8 per kilowatt once the two companies join Sosian Energy on the national grid in the first quarter of 2026.

This is in contrast to the KSh 22 per kWh cost of fossil fuel or hydro-generated power.

"The entry of the IPPs is expected to yield a significant drop in power tariffs and, in turn, attract more investors locally and regionally, as they will have huge savings on energy and create employment opportunities," he stated, as quoted by MyGov on Tuesday, July 8.

Geothermal steam wells on the Menengai Crater floor in Nakuru county will supply electricity to the IPPs.

In 2023, the first geothermal power station in Menengai, which was constructed by the local company Sosian Energy and funded by the Chinese company Zhejiang Kaishan Compressor at KSh 6.5 billion, began producing electricity.

Sosian Energy and the GDC inked a 14-year, KSh 1.8 billion contract for system management and maintenance.

GDC built the Menengai fields as part of its responsibility to carry out the capital-intensive task of exploring geothermal steam and then creating viable fields by drilling production wells and erecting steam gathering systems.

In 2013, Sosian Energy, Quantum Power East Africa, and the American company OrPower Twenty-Two Company were chosen through a competitive bidding process by GDC to construct, run, and own the first three power plants in Menengai.

Each produces 35 megawatts to feed into the national grid for a total of 105 megawatts.

While Kenya Electricity Transmission Company (KETRACO) has installed a 132 kilovolt (kV) substation to transmit electricity from the three power plants, GDC has built the steam gathering system.

Under the Menengai model, the GDC intended to handle the up-front risks before inviting private sector companies to build, own, and run the facilities for 25 years.

In other news, Kenya Power changed the electricity rates for the 2025/2026 fiscal year.

KPLC clarified that the tariff determines the cost of electricity or the monthly bill that consumers receive.

The utility company advised customers to keep their monthly consumption below 30 units for three consecutive months to enjoy lower tariffs.

Source: TUKO.co.ke