London-headquartered developer Globeleq has signed a $72m debt funding agreement for its 35MW Menengai geothermal independent power project (IPP) in Nakuru county. A construction start is expected in Q1 2023, following financial close.
The debt will be provided by mandated lead arranger the African Development Bank (AfDB), the Eastern and Southern African Trade and Development Bank (TDB) and Finnish state majority-owned development finance institution (DFI) Finnfund.
Project developer Globeleq will provide equity and will serve as operations and maintenance (O&M) contractor once commercial operations start in 2025.
Menengai is Globeleq’s first geothermal project, chief executive Mike Scholey said. Globeleq acquired a controlling stake in the Menegai IPP from Quantum Power in February 2021 (AE 432/10).
The funding announcement followed a commitment to fast-track renewable projects by the Kenyan and UK governments at the COP27 climate conference in November. Globeleq is 70% owned by the UK government’s British International Investment (BII – formerly CDC) and 30% by Norwegian DFI Norfund.
Power will be evacuated through a 13km 132kV transmission line – completed by Kenya Electricity Transmission Company (Ketraco) – and will be sold to Kenya Power and Lighting Company under a 25-year power purchase agreement (PPA).
The Globeleq Menengai plant is one of three IPPs that signed 25-year project implementation and steam supply agreements with state-owned Geothermal Development Company (GDC) in 2014 (AE 288/10). The three IPPs are expected to add an aggregate 460MW to the grid in Phase I of the Menengai geothermal project.
Menengai is the second large-scale geothermal field being developed in Kenya after the Olkaria units, also in Nakuru county.
