KenGen will invest in the production of fertilizers

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state owned Kenya Electricity Generating Company (KenGen) revealed branch plans in fertilizer production.

The company announced that it had launched a search for consultants to determine the viability of fertilizer production at its Olkaria fields in Naivasha as part of a new revenue diversification offering. The move comes at a time when a severe shortage of vital agricultural inputs threatens the success of the country’s crops and could lead to widespread food shortages.

KenGen’s plans also come at a time when the amount of fertilizer available worldwide has nearly halved, while the cost of some types of fertilizer has nearly tripled in the past 12 months, according to the United Nations.

Increase in fertilizers in the world

The spike in global fertilizer prices began in early 2021 due to the impact of the Covid-19 pandemic. The ongoing war between Russia and Ukraine has aggravated the situation. Currently, fertilizer prices in Kenya stand at 6,000 shillings per 50-kilogram bag, an increase of 71% from the previous year.

“(KenGen) is now inviting proposals to provide the following consultancy services to undertake a feasibility study for Green Hydrogen, Ammonia and Fertilizer Production and its Pilot Plant at Olkaria, Naivasha – Kenya”, KenGen said in the tender documents.

The feasibility study will determine the size of the proposed plant and the timeline for its construction, KenGen said. The company will rely on its own source of electricity which it reserves for auxiliary uses, which gives it another strategic advantage.

KenGen would also face existing players such as Japanese conglomerate Toyota Tsusho and Kenyan fertilizer maker Fertiplant East which have factories in Eldoret and Nakuru respectively. Ammonia is produced in large quantities around the world for agricultural fertilizers, but uses natural gas or other fossil fuels. Green hydrogen and ammonia production plants have gained traction around the world as geothermal producers consider revenue diversification efforts.

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