NAIROBI, June 30 (Reuters) - Kenya invited bids on Monday for the construction of two electricity generation plants from underground gas for a combined 60 MW from geothermal power.
Endowed with vast geothermal energy resources in the Rift Valley, the east African nation wants to expand its generation capacity by 5,000 MW by 2017 from about 1700 MW now, to lower tariffs and cut costs of doing business.
The state-run Geothermal Development Company (GDC) said in a notice in a local daily newspaper that the winning firms will be expected to finance the plants and to complete building them by the end of next year.
Each plant will generate 30 MW.
Independent producers that are selected will be offered a power purchase agreement with distributor Kenya Power, GDC said.
Developing geothermal power plants usually requires high upfront costs, due to the expensive drilling of wells to tap the gas. But the energy source is usually cheaper and more reliable in the long run than thermal power or hydro generation. (Writing by Duncan Miriri; Editing by Sophie Walker)