Olkaria PPP Investor Conference 140MW PPP Geothermal Project 27 th November, 2019 Request for Qualifications Stage PRESENTATION BY: REBECCA MAINO MANAGING DIRECTOR & CEO, KenGen
Contents 1. 1. Sector In Institutional Framework 2. 2. Introductio In ion to KenGen 3. 3. Project Overv rview Larger Headline Goes Here 4. 4. Procurement process Pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. Proin pharetra nonummy pede. Mauris et orci 5. 5. Sch chedule Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Maecenas porttitor congue massa 2
KENYA POWER SECTOR INSTITUTIONAL FRAMEWORK PO POLIC ICY / GU GUIDANCE RE REGULATION GE GENERATION / ~62% EXPL EX PLORATION i nstalled IPPs share National Installed Capacity: 2,898MW TRANSMISSION DISTRIBUTION DIS
NATIONAL INSTALLED CAPACITY & GENERATION MIX Generat eration ion Mix 2018/19 Instal alled led Capacity acity (MW) ) October ober 2019 Solar 0.52% 1.76% Imports Solar 1.48% Cogeneration 0.97% 0.00% 11.60% Wind Cogentn Wind Thermal 10.37% 28.51% 11.29% Hydro Hydro 32.55% 27.88% Thermal 29.29% Geothermal Geo 43.79% Hydro Geothermal Thermal Cogeneration Solar Wind Total 826.2MW 848.7MW 808.1MW 28.0MW 50.9MW 336.1MW 2,898.0 Includ udes es Off-grids ids 4
INSTALLED CAPACITY – KEY PLAYERS IPPs 36% 36% KenGen en 62% 62% RE REREC REC 2% 2% KenGen REREC IPPS Total-MW 1795.6MW 50.0MW 1052.4MW 2898.0MW 5
KenGen: Overview- who we are • We are now in our 65 th Anniversary • 70% Govt. (30% public: 6.594 bln shares issued) • Our Motto: ENERGY FOR THE NATION. M ission: …t o efficiently generate competitively priced electric energy… V ision: … to be the market leader in the provision of reliable, safe, quality and competitively priced electric energy… V alues: … T OUR eam Spirit; Integrity; Professionalism & STRENGTH: Safety 1,795 MW (~75% sales market share) Skilled Staff: ~2,500 6
KenGen: Overview- Our Installed Capacity KenGen Energy Mix 25.5MW Wind 100% 1% 2% 14% 15% 253MW Diesel & Gas 33% 39% Geothermal 818MW 46% Hydro 690MW 50% 2019 2018 with Olkaria V new addition 7
KenGen: Overview-Our Consistent growth +165.4 MW expected later this year (Olkaria MW V) 1,796 1,630 1,631 1,631 1,617 1,409 1,245 1,213 1,187 1,187 1,009 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 8
KenGen: Overview-our Asset Base-Kes Billion Balance Sheet as at 31 st Dec. 2018 379 377 367 343 16% 250 +266% 189 163 161 151 103 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 9
GOOD-TO-GREAT JOURNEY Horizon I Horizon II Horizon III Base Plan Revamped plan 10 years+ (> 2025) Great 2013-15 2016-25 Explore expansion Company opportunities 2008-12 Create sustainable • Drive expansion power growth in Kenya Delivered beyond Kenya 375+MW Stabilise power • Deliver 2,500MW situation in Kenya • Establish a strong • Delivered 325+MW African footprint • Create value for our shareholders • Increased RoE to • Leader in technology 12.5% • Lower tariffs and innovation • Drilled 150+ • Diversify business geothermal wells • Build capabilities Good for our future Company Time ~900MW 1631M Scaling up! W 10
GOOD-TO-GREAT JOURNEY KenGen: ISO CERTIFIED COMPANY KShs. 25B Public PIBO / Infrastructure Bond (2009); KShs. 26B Rights Issue (2016) Rights Issue Big Four agenda 83MW of early driver; Energy generation; prudent competitively Pilot geothermal priced electricity, Park Wellheads reservoir steam, water, etc. (planned) management and to industries / sustainability manufacturers Good-to- Great SPV / PPP; profit 2 conventional Innovative retention; reducing plants each with 280MW plant Finance reliance on twin 70MW units; Government largest single support geothermal project globally Geothermal Largest in Spa Africa; prime tourist attraction 11
DRILLING PERFORMANCE- WE DO THIS VERY WELL 12
GEOTHERMAL – ……AND DEVELOPMENT AND OPERATION TOO! OUR GEOTHERMAL GROWTH PATH 13
GEOTHERMAL – ……WE KEEP IMPROVING OUR GEOTHERMAL EXPERTISE CENTRE OF EXCELLENCE WELL TESTING SERVICES GEOTECHNICAL SERVICES Ethiopia, • Djibouti • Rwanda Sudan • • DEEP DRILLING SERVICES POWER PLANT OPERATIONS & MAINTENANCE SERVICES 14
GEOTHERMAL – AND WE ARE ON THE GLOBAL MAP Japan 549 Iceland 755 Kenya 849 Italy 944 Mexico 951 New zealand 1005 Turkey 1347 Philiphines 1868 Indonesia 1948 United States 3653 0 500 1000 1500 2000 2500 3000 3500 4000 15
THE OLKARIA PPP PROJECT 16
GEOTHERMAL POTENTIAL - KENYA Rift Region Potential (MW)Central Rift 38oE North Island 4oN Menengai 1,600MW L. Turkana ETHIO PIA Eburru 250MW Central Island H Arus Bogoria 400MW u r i 2,250MW South Island South Rift Mesozo ic Cenozoic Barrier Volcano sediments volcanics Olkaria 2,000MW Namarunu UGANDA Longonot 750MW Emuruangogolak Suswa 600MW Lake Magadi 100MW Silale K K E K K E E EN E N N N Y N Y Y YA Y A A A A Mt. Elgon K E N Y A K Paka 3,450MW Korosi L. Baringo Nyambeni North Rift Arus-Bogoria Kisumu Oo Mt. Kenya Lake Baringo 200MW Menengai Korosi 450MW Homa Hills Eburru Paka 500MW L. Naiv asha Olkaria Longonot Silali 1,200MW Mozambique Suswa metamorphic Nairobi Emuruangogolak 650MW Ol'Esakut belt Namarunu 400MW Olorgesaille Barrier 450MW 2oS L. Magadi 50 0 100 150 Shombole 3,850MW Kilometers Chyulu TA Ol'Doinyo Lengai NZAN Nyanza Basal t-Trachy te-Rhyol ite cent ers IA Neph elinit ic cent ers Kilimanjaro Homa hills 100MW Alka line ce nters Lak es Geot hermal Prospects Akira 350MW Geoth ermal Fiel ds 38oE 36oE Rift F aults 450MW Total Potential 10,000MW 17
OLKARIA PPP PROJECT OVERVIEW Olkaria Geothermal Field • The Olkaria geothermal field is in Naivasha, approximately 120 km northwest of Nairobi • The entire Olkaria volcanic field covers an area of approximately 240 km2 and is situated at an elevation ranging between 1,900 and 2,200 masl. • The project wells have been pre-drilled to support the target plant capacity plus a buffer Olkaria PPP Project Site • The project area is in the northeastern sector of the Olkaria geothermal field • The power plant location is next to the existing Olkaria II power station • Grid connection via a ~3.75km line to the Olkaria 1 AU • The land required for the Project is leased by KenGen from the Kenya Wildlife Service and will be made available to the Project Company via sub-lease 18
OUR PPP JOURNEY Our Advisors November 2019 April 2019 Commencement of Approval of the Project Feasibility Study the Procurement for a developer – 2015 Issue of the RFQ Procurement of the Transaction Advisors 2012 Project approved as a National Priority Project for development as PPP 19
OLKARIA PPP PROJECT Opportunity to enter a dynamic and growing energy sector with a greenfield renewable power project supported by a proven geothermal resource and strong project partner Opportunity to enter a growing electricity market in one of the fastest growing economies in Sub- 1 Saharan Africa 2 Strong development partner in KenGen (25% equity investment) 3 Build-Own-Operate-Transfer (BOOT) opportunity 4 Location adjacent to proven geothermal resource and available interconnection 5 KenGen Providing Project site, equity, and long term steam supply 6 Long-term PPA providing stable revenue stream 7 Positive social and environmental impact 20
Olkaria Project Overview First PPP project developed by KenGen under the PPP Act 2013 KenGen owns and operates 5 geothermal plants and 14 wellhead units with a total combined capacity of about 685MW. Construction of a 70MW unit is in progress ~ 140 MW Size Build, Own, Operate, Transfer (BOOT ) PPP type Special Purpose Vehicle (SPV)-25% shareholding by KenGen Ownership Step 1 Request for Qualification Procurement Step 2 Request for Proposal Kenya Power Offtaker 25 years, and transfer to KenGen at peppercorn at the end of the PPA PPA duration term Steam Supplier KenGen (25 years) 120 km northwest of Nairobi Location COD date ~3 years from financial close 21 21
The Olkaria PPP Project Description Design, Finance, Construction, Operation and Maintenance of 140MW Geothermal Power Project Design, Finance, Construction, Operation and Maintenance of above ground steam gathering system(O&M contracted to KenGen) Design, Finance, Construction, Operation and Maintenance of about 3.75km transmission line from the Project to Olkaria I Unit 4&5 substation and the associated infrastructure(Transferred to KP/KETRACO upon commissioning) Purchase of steam from KenGen via a 25 steam sale agreement Sale of electricity to the Kenya Power via a 25 year Power Purchase Agreement Transfer of the plant back to KenGen after 25 years at peppercorn 22 22
PPP PROJECT COMPONENTS/SHARE OF RESPONSIBILITY BETWEEN KenGen-PRIVATE SECTOR Power Plant Interconnection SAGS Wells & wells Civil Works Finance SPV SPV SPV KenGen Construct SPV SPV SPV KenGen Operate SPV KPLC/KETRACO KenGen KenGen 23 23
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