Kenya is set to significantly improve its geothermal capacity with the signing of financing agreements for the 35MW Menengai geothermal project by independent power producer, Globeleq, and the African Development Bank (AfDB); the Eastern and Southern African Trade & Development Bank (TBD); and FinnFund.
The signing – which would see $72 million in debt funding committed to the project – places the project on track for the start of construction in 2023 and commercial operation by 2025, with Globeleq serving as operator, providing equity, project development and construction management.
In addition to improving power generation in the country, the project will allow the government to create significant forex savings, with TBD CEO, Michael Awori, stating that, “TBD is a strong supporter of the energy sector in its member states, tackling short-term needs by financing the trade of energy commodities and long-term climate ambitions via renewable energy projects including wind, solar run-of-the-rive hydro and now geothermal power.”
Of the $72 million financing, the AfDB will be providing $29.5 million as senior debt, mobilizing $22.4 million in co-financing. According to AfDB Vice-President of Power, Energy, Climate and Green Growth, Dr. Kevin Kariuki, “We facilitated $20 million concessional financing from the Clean Technology Fund to support the sustainability of the tariff and, for this specific project, we will provide a Partial Risk Guarantee of $4 million to enhance its bankability.”
The Menengai geothermal project represents part of the larger Menengai complex, the second large-scale geothermal field currently under development in the country. The project aligns with the government of Kenya and the UK’s COP27 commitments to enhance investments in green energy across the East African country.
