Kenya Electricity Generating Company (KenGen) has started work on a 280 MW geothermal power plant in Olkaria, Naivasha.

The total cost of the project is $981m and has been financed by KenGen, the Kenyan government, German bank KfW and the World Bank.

The plant will be built by a consortium of South Korea’s Hyundai and Japan’s Tshusho, while transmission lines and substations are being constructed by KEC of India.

Once completed, it is anticipated that the plant will boost Kenya’s national grid by 25 per cent.

KenGen chief executive Eddy Njoroge said: “With such a huge boost from this clean, reliable and competitively priced form of electricity, consumer prices will ease as the country will require less generation of the more expensive modes of generation.”

Olkaria has huge steam potential which KenGen plans to further utilize with another geothermal project, which is expected to have a capacity of 520 MW.

By 2018 the company wants to provide half of Kenya’s electricity via geothermal.