Firm secures Sh8.6b to build 35MW plant

A Geothermal development Company steam well in Menengai ,Nakuru county.[Kipsang Joseph, Standard]

One of the firms that have been seeking to build geothermal power plants at Menengai fields in Nakuru County is set to start construction after securing funds to kickstart the project.

Globeleq said it has received a loan of $72 million (Sh8.64 billion) from a consortium of financiers led by the African Development Bank (AfDB) to put up the 35-megawatt power plant at Menengai.

Globeleq in 2021 acquired a controlling stake in Quantum Power East Africa (QPEA), one of the three Independent Power Producers (IPPs) selected to set up power plants in the area.

The fields are owned by the Geothermal Development Company (GDC), which derisked them by drilling geothermal wells and building steam gathering systems before it recruited IPPs to build power plants under the Public Private Partnership (PPP) model.

The other firms are Sosian Energy and Orpower 22. The three are expected to put up plants with a combined electricity generating capacity of 105MW or 35MW each.

"Globeleq announces that it has signed financing agreements with the African Development Bank (AfDB) (as mandated lead arranger), the Eastern and Southern African Trade and Development Bank and Finnfund, with regard to the $72 million debt funding for the 35MW Menengai geothermal project in Nakuru County," said the firm in a statement.

Project development

It added that it will provide equity, project development and construction management for the project whose total cost is expected to be $108 million (Sh12.96 billion).

Globeleq is owned 70 per cent by British International Investment (formerly CDC Group) and 30 per cent by Norfund.

"The announcement follows the recent joint commitment by the Kenyan and UK Governments at COP27 in Egypt to fast-track green investment projects worth Sh500 billion in the country, including the Menengai project," said Globeleq.

The firm expects construction of the project to commence during the first quarter of 2023.