Globeleq’s Menengai geothermal project reaches financial close
Published by Jessica Casey,
Editor
Energy Global,
Globeleq, a leading independent power company in Africa, and its project partner, Geothermal Development Company (GDC), have reached financial close on their US$117 million 35 MW Menengai geothermal project in Nakuru County, Kenya. Globeleq will shortly issue a notice to proceed to the EPC contractor, Toyota Tsusho Corporation (TTC) and their fully owned subsidiary CFAO Kenya Limited, who will start construction activities in the coming weeks.
Globeleq’s Menengai project will be the company’s first geothermal plant. It will deliver clean, reliable, and affordable baseload power to the national grid and enable GDC to monetise the available steam resources from the Menengai steam field. Steam will be supplied to the project by GDC under a 25-year project implementation and steam supply agreement. Globeleq will operate and maintain the power plant once it reaches commercial operations in 2025. Once operational, electricity will be sold to Kenya Power, the national distribution company, under a 25-year power purchase agreement.
Globeleq is building a substantial business in Kenya where it already owns and operates the 52 MWp Malindi solar PV plant, located north of Mombasa. The group is looking to expand the Malindi solar plant with 40 MWac of additional solar capacity and 40 MW/40 MWh battery storage.
Mike Scholey, Globeleq’s CEO, said: “Menengai is an excellent example of how lenders and independent power producers can work with Governments to successfully harness natural resources and generate clean and reliable power. 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.”
Paul Ngugi, Managing Director and CEO of GDC, added: “The financial close reached by Globeleq and its partners is a great milestone for the geothermal sector in Kenya. It affords the country another opportunity to develop 35 MW more of clean, affordable, and reliable power. The Menengai geothermal project is of strategic national value especially at this critical moment when Kenya is determined to decarbonise 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.”
Dr.Kevin Kariuki, Vice President for Power, Energy, Climate and Green Growth of the African Development Bank and Mandated Lead Arranger, commented: “This milestone underscores the African Development Bank’s commitment to advancing sustainable energy projects on the continent. We are proud to have served as the mandated lead arranger on this important project and we are elated to celebrate the collaboration and dedication that made this milestone possible. Indeed, the Menengai geothermal project exemplifies our shared vision for a greener and more resilient future for Africa, powered by innovative solutions and strategic partnerships.”
Michael Awori, TBD CEO, stated: “This exciting transaction comes at a time where TDB is ramping up its support to the energy transition. We are also pleased to be part of Kenya’s journey of meeting 100% of its electricity needs with clean energy by 2030, by adding to the country’s grid more cost-effective green baseload power, while boosting economic activity. We are likewise pleased to add geothermal energy among the sources of renewable energy we are financing in the region, alongside hydro, solar, and wind.”
Helena Teppana, Finnfund’s Associate Director, concluded: “The way that growing economies like Kenya meet their rapidly growing energy demand will be crucial for global efforts to curb climate change. For us at Finnfund, this exciting investment is yet another step in our commitment to make €1 billion of new investments in climate finance by 2030.”
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The Winter 2023 issue of Energy Global hosts an array of technical articles weather analysis, geothermal solutions, energy storage technology, and more. This issue also features a regional report looking at the future of renewables in North America, and a report from Théodore Reed-Martin, Editorial Assistant, Energy Global, on how Iceland utilises its unique geology for renewable energy.
Read the article online at: https://www.energyglobal.com/other-renewables/03012024/globeleqs-menengai-geothermal-project-reaches-financial-close/
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