Globeleq, GDC reach fin close on 35-MW geothermal project in Kenya

Africa-focused independent power producer (IPP) Globeleq and its Kenyan partner, the state-owned Geothermal Development Company (GDC), have reached financial close on their USD-117-million (EUR 105.2m) Menengai geothermal project in Nakuru County, Kenya, a press release said on Thursday.

The 35-MW project will be Globeleq's first geothermal power plant and will supply clean and affordable baseload power to the national grid by harnessing the steam resources available in the Menengai reservoir. GDC will supply steam to the plant under a 25-year project implementation and steam supply agreement.

Construction of the project, by EPC contractor Toyota Tsusho Corporation (TYO:8015) and its subsidiary CFAO Kenya Limited, will begin in the coming weeks, once they receive notice to proceed from Globeleq, the IPP said.

The Menengai plant is expected to reach commercial operation in 2025.

Globeleq will be responsible for operating and maintaining the facility and will sell its electricity to distribution company Kenya Power under a 25-year power purchase agreement (PPA).

“We are excited to be starting construction on our first geothermal power plant and look forward to other opportunities in the region. I would also like to thank our partner GDC, the senior lenders at AfDB, Finnfund and TDB, our EPC contractor, TTC, and our offtaker, Kenya Power, for the achievement of this important milestone and their patience during the process,” Mike Scholey, Globeleq's CEO, said.

“[…] The Menengai geothermal project is of strategic national value especially at this critical moment when Kenya is determined to decarbonize its economy. The available geothermal resource in Menengai is plentiful and at GDC we are happy that we made the project bankable for investor-entry,” added Paul Ngugi, Managing Director and CEO of GDC.

(USD 1.0 = EUR 0.899)

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