State-owned Kenya Electricity Generating Company (KenGen) has revealed plans branch into fertilizer production.
The firm announced it has kicked off the search for consultants to determine the viability of fertiliser production at its Olkaria fields in Naivasha in a fresh revenue diversification bid. The move comes at a time an acute shortage of the vital farm input is threatening success of the country’s crops and could lead to widespread food shortages.
The plans by KenGen also come at a time quantity of fertiliser available globally has almost halved, while the cost of some types of fertiliser has nearly tripled over the past 12 months, according to the United Nations.
Surge in global fertiliser
The surge in global fertiliser prices began at the start of 2021 due to the impact of the Covid-19 pandemic. The ongoing war between Russia and Ukraine worsened the situation. Currently, fertiliser prices in Kenya stand at Sh6,000 per 50-kilogramme bag, a 71% increase from a year earlier.
“(KenGen) now invites proposals to provide the following consulting services to undertake a feasibility study for green hydrogen, ammonia and fertiliser production and its pilot plant at Olkaria, Naivasha – Kenya,” said KenGen in tender documents.
The feasibility study will determine the size of the proposed plant and timelines for its construction, said KenGen. The company will rely on its own source of electricity which it reserves for auxiliary uses, giving it another strategic advantage.
KenGen would also be taking on existing players such as Japanese conglomerate Toyota Tsusho and Kenyan fertiliser maker Fertiplant East which have plants in Eldoret and Nakuru respectively. Ammonia is produced in vast quantities worldwide for agricultural fertilisers but uses natural gas or other fossil fuels. Green hydrogen and ammonia-producing plants have gained traction around the world as geothermal producers eye revenue diversification drives.
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