GLOBELEQ'S 35MW MENENGAI GEOTHERMAL POWER PROJECT IN KENYA REACHES FINANCIAL CLOSE

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Dec 28, 2023, 03:00 ET

NAIROBI, Kenya and LONDON, Dec. 28, 2023 /PRNewswire/ -- Globeleq, the leading independent power company in Africa, and its project partner, Geothermal Development Company (GDC), are pleased to announce that they have reached financial close on their US$117 million 35MW Menengai geothermal project in Nakuru County, Kenya. Globeleq will shortly issue a notice to proceed to the engineering, procurement and construction 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 which is located north of Mombasa. The Group is looking to expand the Malindi Solar plant with 40MWac of additional solar capacity and 40MW/40MWh 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 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."

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, TDB CEO said:
"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, also commented:
"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."

About Globeleq
Globeleq, which is owned 70% by British International Investment and 30% by Norfund, is the leading developer, owner and operator of electricity generation in Africa. Since 2002, its experienced team of professionals have built a diverse portfolio of independent power plants, generating 1,769 MW in 16 locations across 7 countries, with a further 488 MW in construction and more than 2,000 MW of power projects in development.
More details at www.globeleq.com.

About Geothermal Development Company
The Geothermal Development Company Limited (GDC) is a 100% government-owned State Corporation operating under the Ministry of Energy and Petroleum. It was created as a special purpose company to accelerate the development of geothermal resources in the Republic of Kenya.

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