Kengen To Diversify Into Fertilizer Production.
- Energy & Environment, Money & Markets
- farming kenya, food shortage kenya, kenya agriculture
- Nyambura Tabitha
Kenya electricity generating company [KenGen], a state-owned company, has disclosed plans to set up a fertilizer production plant. It seems like the company has identified a gap in the market. Kenya is suffering from a dire shortage of fertilizer which is one of the major causes of low harvest.
The company believes the fertilizer production venture will be a hit if scaled to the huge local market which is not saturated with competitors.
Revenue Diversification
KenGen will also be eyeing to diversify their revenue which has been decking. The company which gets 90 percent of its revenue through energy production saw its revenue drop in the year 2020/2021 to sh 1.18billion from sh 18.37 billion in the year 2019/2020.this as a result of the new sh 13.5 billion tax bills.
The company has already started looking for a variety of consultant companies to assess the environmental and economic viability of this new adventure. The feasibility study will determine the cost, size, and construction timelines. The production is set to be done at its pilot plant at Olkaria geothermal fields, Naivasha.
Fertilizer shortage
The supply of fertilizer globally has halved in the past years. This global shortage has led to skyrocketing prices with some types of fertilizers seeing their price triple according to the United Nations report.
The rising fertilizer prices which were on rising due to the covid 19 pandemic were made even worse with disruption of the supply chain due to the ongoing conflict in Ukraine.
Other factors in rising in prices may also be due to the producing countries restricting exports to protect their farmers.
This is having a heavy effect on Kenya which depends heavily on imported fertilizer.
Fertilizer prices in Kenya currently stand at sh 6000 per 50-kilogram bag. This is a 71 percent jump from last year. The Kenyan government has recently tried to remedy the situation by introducing a sh 5.7 billion fertilizer subsidy.
How will KenGen produce fertilizer?
Currently, KenGen redirects hot brine back to the ground to maintain reservoir pressure. This is a waste considering the brine solution contains compounds and elements such as 600- 800 milligrams of silica per kilogram of the fluid and 1.5-2 milligrams of lithium per kilogram of the fluid. Elements like silica can be extracted to produce high-level products such as borate fertilizer.
Lithium on the hand is a key component in batteries used in electric vehicles. This has been rising in value. Lithium is currently trading at sh 1.3 million per ton which is set to increase as the demand for lithium keeps rising.
Lithium also has other functions like making toys, and medicine and can be mixed with aluminum to form an alloy that makes high-speed railcars and planes.
Geothermal fluids can also be used for mineral baths, and greenhouses and can also provide hot water.
