Kaishan Renewable Energy Development Pte Ltd. (Kaishan), a wholly owned subsidiary of the China-based Kaishan Group Co. Ltd., has announced the 100% acquisition of OrPower 22, a subsidiary of US-based Symbion Power.
OrPower 22 is one of the three Independent Power Producers (IPPs) that have been awarded build-own-operate contracts for 35-MW geothermal power plants in the Menengai field in Kenya. Drilling of the geothermal wells and construction of the steam gathering system in Menengai was done by state-owned Geothermal Development Company (GDC).
The Kaishan Group also happens to be the EPC contractor for the Sosian Menengai geothermal power station, which has recently started supplying electricity to Kenya’s national grid.
The acquisition includes USD 3.3 million for assets and USD 8 million for technological service fees. The acquisition price is based on the target company’s shares. According to the company’s financial data, it has a net assets of more than negative USD 5 million as of the end of 2022.
The Kenyan government had previously granted a 30-year power generation license and Steam Supply and Purchase Agreement to OrPower 22 following a winning bid back in 2013. However, the Symbion-Menengai power station is yet to be constructed due to various reasons. In 2020, Symbion Power signed a Joint Development Agreement with another Kenyan partner but the results of the agreement failed to materialize.
Kaishan has stated the intention of injecting additional capital into OrPower 22 after the acquisition and starting the construction of the geothermal power plant as soon as possible. The project is expected to generate an income of around USD 400 million in the first 25 years of operations. The company also intends to harness the experience and resources from the Sosian Menengai Project to control the operations and maintenance costs.
