ADF geothermal energy project to boost supply in Kenya

Menengai geothermal energy project will set the stage for investments that will help meet Kenya’s rapidly increasing demand for power and transform the country into a competitive clean energy economy.

On 14 December 2011 in Tunis African Development Bank (AfDB) Group Board of Directors, approved two financing vehicles to support the project. It will be financed through a loan of USD 124 million from African Development Fund (ADF) concessionary resources, and a loan and grant totaling USD 25 million from the scaling-up renewable energy program under the Climate investment funds for which AfDB Group is an implementing agency.

Kenya has substantial geothermal energy potential, and has made this sector a priority in its 2030 vision, with the objective to develop 5000 MW of geothermal energy. The Menengai field alone has a potential of up to 1600MW, and the AfDB Group support will help develop the steam field for generation capacity of up to 400 MW in a first phase, which is represents a 20% increase in installed capacity of the country. The project is being co-financed for a total cost of USD 503 million by a group of lenders including the French Development Agency, the European Investment Bank as well as the Government of Kenya. It will be completed by July 2016.

Following the approval, AfDB’s director for energy, environment and climate change department, Ms. Hela Cheikhrouhou revealed that this is the first ever project under the Climate investments funds dedicated to an African low income country to be approved by a multilateral development bank.

Ms. Hela Cheikhrouhou emphasized that when completed, the project will help trigger substantial increase in the provision of reliable, clean and affordable energy equivalent to the current consumption needs of 500,000 Kenyan households, 300,000 small businesses and some 1000 GWh to other businesses and industries. The project will also help to avoid some 2 million tons of CO2 per annum. The Menengai geothermal energy development project is situated within the Eastern sector of the African Rift system, about 180 km Northwest of Nairobi.