The African Development Bank Group’s Board of Directors has approved a US$16.5 million loan to support the development of the 35MW OPower Twenty-Two (OTTL) geothermal power plant, a flagship renewable energy project that will increase Kenya’s baseload electricity generation and accelerate its transition to clean energy.
The project is being developed by independent power producer (IPP) OTTL in the Menengai geothermal field just north of Nakuru town, 180 km northwest of the capital Nairobi. This is the third power plant in the sector and complements the operational 35 MW Sosian Menengai geothermal power plant and the 35 MW Globerek Menengai geothermal project, the latter of which is still under construction with a separate bank loan.
Together, these projects will unlock the full potential of the first phase of the Menengai geothermal field of 105 MW. The Menengai field itself was developed using a previous US$145 million loan from the African Development Bank to the Geothermal Development Company (GDC).
GDC, a government-owned entity, is responsible for drilling, producing and supplying high-quality steam to new power plants. Kenya Power and Lighting Company, also state-owned, will be the sole taker of the geothermal power plant under a 25-year power purchase agreement (PPA).
The project will not only expand power generation capacity, but will also deliver affordable and sustainable baseload electricity to Kenya’s national grid at the lowest tariffs in the country, contributing to lower overall electricity costs. Once fully operational, the plant will generate approximately 301 GWh of reliable clean energy per year, enhancing security of supply. It will also play a key role in diversifying Kenya’s energy mix and reducing dependence on expensive diesel-fueled power generation.
The plant is expected to deliver significant climate benefits, including avoiding 1.9 million tonnes of greenhouse gas emissions over the 25-year PPA period.
Wale Shonibare, director of energy finance solutions, policy and regulation at the bank, said: “The Menengai model demonstrates the power of public-private cooperation, where government-led resource development attracts private investment in geothermal power generation, resulting in mutual benefits. Geothermal developers secure stable revenues from steam sales, monetizing their significant investment in Menengai and reinvesting it in expanding geothermal development nationwide, while the private sector drives efficient power generation.”
“We are honored to build the Opower Menengai Geothermal Power Plant using our own developed and completely proprietary next-generation geothermal power technology, thereby fulfilling our corporate mission of ‘contributing to saving the planet,'” said Qi Jingwen, OTTL Director. “Support from international financial institutions will enable deeper participation in the development of new green energies in Africa.”
By directly supporting Pillar 1 of Kenya’s Mission 300 Energy Compact, this project strengthens the Bank’s energy priorities while advancing Kenya’s broader development agenda. By contributing to the country’s goal of increasing geothermal power generation capacity from 940MW to 1824MW by 2030, it is also helping accelerate Kenya’s transition to 100% clean energy through private sector investment.
The bank’s loan will complement additional funding expected from the International Finance Corporation (IFC), and will bring total project debt to US$64.4 million, out of an estimated total project cost of US$91.9 million.
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