Dr. Silas M. Simiyu Managing Director & CEO Geothermal Development Company Ltd May 18, 2011

1. Development of Geothermal Resources in Kenya Dr. Silas M. Simiyu Managing Director & CEO Geothermal Development Company Ltd May 18, 2011

2. GDC –steam resource development ERC IPPs KenGen Importss REA Ministry of Energy KETRACO –Transmission /Wholesale Market operator KPLC –Distribution/Supply Energy Tribunal Customers Power Sector Overview

3. The Geothermal Development Company • Incorporated in 2008 to accelerate development of geothermal resources in Kenya by reducing upfront risks to investors

4. Geothermal in Electricity Mix

5. Projected Electricity Demand • Least Cost Power Development Plan (LCPDP) • Electricity demand of about 15,000 MW by 2030 is projected. • At least 5,000 MW of electricity will come from geothermal

6. Mission & Vision Vision: To be a world leader in the development of geothermal resources Mission: To develop 5,000 MW by 2030 Core Activities • Resource prospecting • Drilling (all stages) • Field development • Reservoir and management • Contracting for power plant development

7. Geothermal Power

8. Direct Use • Greenhouse Heating • Heating of greenhouses for cut roses ~160 hectares • Extraction of CO2 & H2S • Injection of CO2 to aid in photosynthesis • Fumigation of soils and sterilization of liquid recycled plant fertilizers using H2S • Water Recovery • Potable water • Irrigation • Industrial Applications • Heating and drying • Industrial processes

9. Why Geothermal?

10. Abundant and indigenous • Suswa, • Longonot, • Olkaria, • Eburru, • Menengai, • Arus-Bogoria, • Lake Baringo, • Korosi, • Paka, • Lake Magadi, • Badlands, • Silali, • Emuruangogolak, • Namarunu • Barrier • Mwananyamala • Homa Hills

11. 0 Low Cost Assessment criteria Location and transmission benefit Low cost US$c/kwh Generation Option Natural potential Environment friendly Comments Availability Fast delivery* • Geothermal • Significant proven potential • Significant potential, but dependent on weather • Wind 8.8 • Nuclear • Min plant size of 500 MW required, politically sensitive • Gas CNG • Need to import, liquify for transport and re-gas • Coal ? ? • Coal potential in Kitui • Attractive intermediate • capacity, but not large base load • MSD 10.2 • Hydro** • High exposure to hydrology • risk (60% of installed capacity) 12.5 • Gas • Kerosene • Current GTs running at high loads, need more base load 16.5 • Solar ? • Dependent on weather with low average availability 30-50 • Could pursue along side coal opportunity ? ? • Co-gene- • ration tbd * Based on construction time – additional time would be needed for feasibility and other pre-construction activities ** 6US cents/kwh based on importing hydro power from Ethiopia vs. 12 US cents/kwh based on remaining projects in Kenya, e.g. Mutonga *** Lower than 10 cents/kwh, greater than 80% availability, less than 3 years, lower than 0.20 CO2 kg/kwh and known natural potentia

12. Other advantages of Geothermal • Green • Not affected by adverse weather • 95% Availability • Predictable cost of power over the plant life • Technology already successful in Kenya • Modular incremental development

13. Development Strategies

14. Single GoK Entity Approach 2003-2012 1956-59 1967-70 1971-76 1976 - 85 1986-2003 • Two Exploratory wells drilled to a depth of ~950m • Drilling continued in Olkaria II Steam field ~ 30 wells by 1992 • Drilling was accelerated and about 23 wells were drilled • GoK & UNDP entered into an agreement to extensively undertake geothermal resource assessment • Decision was to concentrate geothermal development at Olkaria (80km2) after positive well results. • Drilling ongoing • Olkaria IV 140MW planned for 2012 • Wells never discharged and later abandoned • 45 MW (Olkaria I) commissioned between 1981-1985 • From 1992, financiers pulled out and no major works undertaken until 1999 • Six wells were drilled with positive results. • Most financing was from World Bank • Olkaria II 70MW commissioned in 2003

15. Concessioning Olkaria III Jul 2000 1998 Dec 2000 Mar 2002 Sep 2003 2013 2008 • 8MW Com. • 12 MW • 13 MW • 13.6 MW • 55 MW • 100 MW • Olkaria III concession for 100 MW The first 13 MW developed from wells drilled by Government

16. Concessioning Longonot • IPP license given in 2009 • Targets to develop max of 140 MW on a 700 MW Prospect • Observation • Under utilization of the resource • Slow development pace

17. Suswa • Observation • Growth relatively slow, expected development pace not realized 2007 • Suswa (>600 MW) concessioned to IPP

18. Surface Exploration GDC Exploration and Appraisal drilling GDC Feasibility Study GDC Production & Development of Steam Supply GDC Sale of Steam Investment by Private entity/KenGen Construction and Operation of Power Plant Private Entity Development Strategy

19. GDC Development Strategy

20. CHALLENGES

21. CHALLENGES

22. THANK YOU