December 15, 2022
Finnfund is one of the investors financing a geothermal project in Nakuru County, Kenya. Globeleq, the leading private power company in Africa, has signed financing agreements with the African Development Bank (AfDB), Finnfund and the Eastern and Southern African Trade & Development Bank (TDB) with regard to the US$72 million debt funding for the 35MW Menengai geothermal project in Nakuru County, Kenya.
Globeleq, which is owned 70% by British International Investment and 30% by Norfund, is providing equity, project development and construction management experience. The announcement follows the recent joint commitment by the Kenyan and UK Governments at COP27 in Egypt to fast-track green investment projects worth KES500 billion in the country, including the Menengai project. Menengai is a greenfield geothermal project and part of the first phase of the wider Menengai complex, which is the second large-scale geothermal field being developed in Kenya after Olkaria. Construction of the project is expected to commence during the first quarter of 2023 once financial close has been reached. Globeleq will operate and maintain the power plant once it has reached commercial operations in 2025.
Steam will be supplied to the project by Geothermal Development Company (GDC), a Kenya government-owned company under a 25-year project implementation and steam supply agreement. Once operational, electricity will be sold to Kenya Power, the national distribution company, under a power purchase agreement for the same timeframe. The project also benefits from a signed and effective Letter of Support issued by the Government of Kenya. The project will deliver clean and cheap baseload power to the national grid and enable GDC to monetise the available steam resources from the Menengai steam field.
Mike Scholey, Globeleq’s CEO said:
“As an active participant in the Kenyan energy sector for many years, the Menengai geothermal project is our first geothermal project. It fully aligns with our focus on quality investments which utilize renewable energy sources to create clean, reliable and cost-effective energy for the country and be an active part of the solution to the climate crisis. We are very excited to collaborate with our partner GDC in bringing this important project to fruition and look forward to further developing the Menengai geothermal complex.”
Helena Teppana, Associate Director, Finnfund, commented:
“This investment is yet another step in Finnfund’s commitment to make €1 billion of new investments in climate finance by 2030. The Menengai geothermal project will provide clean and affordable power to the Kenyan grid and will be a domestic source of energy which can generate base load and will have important social and economic impacts. We are proud to be investing in the power sector in Kenya with our partners.”
Media Enquiries: email@example.com (George Cazenove, Fiona Gonyea)
Globeleq is the leading developer, owner and operator of electricity generation in Africa. Since 2002, its experienced team of professionals have built a diverse portfolio of independent power plants, generating more than 1,500MW in 14 locations across 6 countries, with a further 722 MW in construction and more than 2,000 MW of power projects in development. More details on www.globeleq.com.