African Development Bank Leads USD 117 Million Financing for Menengai Geothermal Plant in Kenya
Financial close has been achieved for a USD 117 million financing deal, led by the African Development Bank (AfDB) as the mandated lead arranger (MLA), alongside partners Eastern and Southern African Trade & Development Bank (TDB) and Finnfund. This funding supports Globeleq’s 35MW Menengai geothermal plant in Nakuru, Kenya, contributing to the nation’s renewable energy goals and enhancing its energy supply and security.
Key Points:
- Project Overview: Globeleq, a major independent power company in Africa, owns 70% of the Menengai geothermal project, which is part of the first phase of Kenya’s second-largest geothermal field development. The project broke ground earlier this year and is expected to commence commercial operations in 2025.
- Project Participants: The financing consortium comprises AfDB, TDB, and Finnfund. Globeleq, with 70% ownership by British International Investment and 30% by Norfund, is providing equity, project development, and construction management expertise.
- National Impact: The Menengai geothermal plant will feed 35MW of renewable energy directly into the national grid, contributing to Kenya’s Vision 2030 of meeting 100% of its electricity needs with clean energy by 2030.
- Project Agreements: Steam for the project will be supplied by the Geothermal Development Company (GDC) under a 25-year agreement. Once operational, electricity will be sold to Kenya Power under a power purchase agreement for a similar timeframe.
- Job Creation and Local Impact: The project is expected to create around 200 job opportunities during the construction phase and 35-40 permanent jobs for local workers once operational. Additionally, it will support local suppliers and communities, fostering increased trade and economic activities.
- Greenfield Geothermal Development: The Menengai project aligns with global commitments to triple renewable power capacity by 2030, as demonstrated by the 118 countries, including Kenya, at COP28. This project contributes to Kenya’s efforts to transition to more sustainable and reliable energy sources.
- TDB’s Commitment to Energy Transition: TDB Chief Executive, Michael Awori, highlights the bank’s increased support for the energy transition. The project adds to the region’s renewable energy mix, alongside hydro, solar, and wind projects financed by TDB.
- CEO’s Perspective: Mike Scholey, CEO of Globeleq, expresses excitement about Menengai being a prime example of collaboration between lenders, independent power producers, and governments to harness natural resources for clean and reliable power. He emphasizes the project’s significance in contributing to Kenya’s sustainable energy goals.
The financial close of the Menengai geothermal project underscores the commitment of key financial institutions and Globeleq to advance Kenya’s renewable energy sector. This landmark project is poised to play a vital role in meeting the country’s clean energy targets, creating jobs, and boosting economic activity while contributing to the global push for increased renewable power capacity.
