AfDB Backs Kenya's geothermal expansion with Sh2.6b loan

Olkaria Geothermal Power Plant in Naivasha. [File, Standard]

Kenya's drive to harness underground heat for stable, clean electricity received a boost on Thursday after the African Development Bank (AfDB) approved a $16.5 million (Sh2.64 billion) loan for a new geothermal power plant.

The financing will support the construction of the 35-megawatt OrPower Twenty-Two plant at the Menengai field, a site rich with geothermal potential located north of Nakuru, the bank said.

Geothermal energy, generated from heat deep within the earth, provides a critical source of "baseload" power for Kenya. Unlike solar or wind, which depend on weather, it can produce electricity constantly, ensuring a stable and reliable supply to the national grid.

The new plant is the third in the Menengai field's first phase. Once all three are complete, they will collectively produce 105 MW, helping to power homes and businesses with affordable, renewable energy.

"Beyond expanding generation capacity, the project will deliver affordable, sustainable baseload power at one of the lowest tariffs in the country," the AfDB said in a statement.

The project is expected to generate roughly 301 gigawatt-hours of electricity annually and will avoid an estimated 1.9 million tonnes of greenhouse gas emissions over 25 years.

Wale Shonibare, the AfDB's Director for Energy Financial Solutions, said the project showcases a successful public-private model. State-owned Geothermal Development Company drills wells and supplies steam, while private firms like OrPower Twenty-Two build and operate the power plants.

"This model delivers mutual benefits," Shonibare said, allowing the government agency to earn revenue and reinvest in further geothermal exploration.

Qi Jingwen, a director at OrPower Twenty-Two, said the support from international lenders enables deeper participation in Africa's green energy development.

The AfDB added the loan advances Kenya's goal of increasing its geothermal capacity from 940 MW to over 1,800 MW by 2030, a key part of its transition to 100 per cent clean energy.

The AfDB's financing is part of a larger $91.9 million project, with additional debt funding expected from the International Finance Corporation, the private lending arm of the World Bank.