Menengai obtains a $72 million loan
Menengai, a Globeleq geothermal project in Kenya, obtains financing from two African banks and Finnfund.
| Sectors | Geothermal Energy, Deep Heat |
|---|---|
| Themes | Investments & Transactions, Project Development, Financing |
| Companies | Globeleq, Banque africaine de développement |
| Countries | United Kingdom, Kenya |
Menengai, a Globeleq geothermal project in Kenya, obtains financing from two African banks and Finnfund.
A $108 million project
Menengai, located in Nakuru County, is funded by the African Development Bank (AfDB). The Eastern and Southern African Trade and Development Bank (TDB) is also participating in the financing. The project requires a loan of $72 million.
The Menengai geothermal project will have a capacity of 35MW. This announcement is the result of an agreement at COP27 between the British and Kenyan governments. London and Nairobi committed to green investment projects worth 500 billion Kenyan shillings.
Menengai is an entirely new geothermal project. It is part of the first phase of the larger Menengai complex. This is the second large-scale geothermal field developed in Kenya after Olkaria.
Political support
Construction of the project is expected to begin in the first quarter of 2023, once financial close is reached. Menengai is expected to become operational in 2025, at which time Globeleq will operate and maintain the plant. Geothermal Development Company (GDC) will provide the steam under a 25-year implementation and supply agreement.
When Menengai is operational, Kenya Power, the national distribution company, will purchase the electricity. This supply will be carried out within the framework of a 25-year power purchase agreement. In addition, the project also benefits from a signed and effective letter of support issued by the Government of Kenya.
Mike Scholey, CEO of Globeleq, states:
“As an active participant in the Kenyan energy sector for many years, the Menengai geothermal project is our first geothermal project. It is in line with our quality investments that use renewable energy sources to create clean, reliable and cost-effective energy for the country and actively participate in solving the climate crisis. We are very excited to work with our partner GDC to complete this important project and look forward to the continued development of the Menengai geothermal complex.”
Menengai will provide clean, low-cost baseload power to the national grid. In addition, it will allow GDC to monetize the steam resources from the Menengai steam field.
