Apr 13, 2017

Mutunguru hydropower project set to benefit Meru County

The Mutunguru Hydropower Project began as a community initiative in 2004. In 2009, the project received support from the United Nations Industrial Development Organization (UNIDO) who donated a 26 kilowatt turbine together with a team of experts for the installation. The community on their end contributed some money and labour to build the intake, a pen stalk and a power house.

Due to lack of funds to install the power lines from 2009-2013, the community was almost giving up on the project. Through partnership, Skynotch Energy then stepped in to provide technical support. The Community Based Organization (CBO) has 1200 members spread over three locations in Igoji West Sub-County and each member represents a household.

Since the rural electrification programme already had most members connected to the grid, the idea was now to produce and sell power back to the grid. The proceeds would then benefit the community.  Skynotch was able to raise the initial capital of $50,000 for a feasibility study which was conducted and completed in 2013. The study found that the project had the capacity to produce 1.8 Megawatts if a few parameters were changed.

In 2014, another feasibility study was conducted through third party financing to pay for the consultants. The study demonstrated that they had the capacity to produce 7.8 Megawatts  with a capital investment of $18 million.  Virunga Power invested in 25% equity stake through Power Africa.

The challenge was now in bringing the 1200 members to form a public company limited by shares. Mutunguru Hydro Electric Power was registered in 2013. The 8 megawatt project from the river run off.  The business model is such that the community develop the project and manage the power. The proceeds are to be shared at agreed rates.

The community has made a number of milestones. They have acquired the necessary licencing, plans and have a tentative commercial date of August 2018. What this means is that according to the Energy Regulatory Commission, they are recognized in the project master plan to sell power back to the grid under the feeding tariff programme. The community has also initiated power purchase agreements with Kenya Power.

Recently, Mutunguru Hydroelectric Company Limited (MHCL) received a grant from the Sustainable Energy Fund for Africa (SEFA) and Africa Climate Technology Centre (ACTC) to finance the Mutunguru 7.8 megawatt Small Hydro Power Project. The grant will used for providing legal support for putting up suitable community measures; financial advisory; support to lenders’ due diligence; support to environmental and social impact assessment; institutional and management capacity building.

The Kenya Climate Innovation Center (KCIC) has provided MHCL with business advisory services especially in policy support and helped in building their procurement capacity. Last year, KCIC was also instrumental in engaging legal services for Mutunguru. The hot desk facility has also been beneficial to MHCL.

By Mercy Mumo

Picture: courtesy virungapower.com

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