$117 Million Deal Closed for Globeleq Menengai Geothermal Plant in Kenya

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$117 million funding shall be awarded to Globeleq Menengai Geothermal Plant that shall enable the commencement of the construction works at the site in weeks to come. This information was revealed by the company on Thursday thereby putting an end to all the delays that had led to the company failing to meet its set target of building the 35MW geothermal plant in the period of the second half of the year 2023. Globeleq has partnered with Geothermal Development Company (GDC) to implement this project.

Globeleq signed a funding deal with three financing institutions that include the African Development Bank (AfDB) in the month of December the year 2022. Unfortunately, financial closure faced delays after the government of Kenya took time to fulfill certain conditions that still remain undisclosed.

The commencement of the construction works on the Globeleq Menengai Geothermal Plant will foresee Globeleq becoming the second company of the three power producers to enable the implementation of the project by the year 2025. Sosian Energy which is under the ownership of the Moi family finished its plant in the previous year.

Globeleq Menengai Geothermal Plant Contractor

The engineering and construction contract tender for Globeleq Menengai Geothermal Plant was awarded to Toyota Tsusho Corporation. The Treasury of Kenya made a signing of a letter of support that would enable the support for this project during July of this year. This signing facilitated the execution of this project by overcoming one of the challenges that dragged the financial closure. This letter that was signed serves the purpose of covering the private investor of the project and the financiers from particular features of the country and also political risks that may be there. This provides help to a firm by facilitating its ability to acquire funding through loans for the particular project at hand.

Globeleq Menengai Geothermal Plant Project Funders

The financiers of the geothermal project are AfDB, Finnfund,and Southern African Trade Development Bank.. The license for the geothermal plant was gotten from Quantum Power which provided the base for the establishment of the firm’s (Globeleq) second clean energy plant in Kenya. The other power plant of the firm is based in Malindi. The Malindi power plant has a capacity of 52MW of solar power and has been supplying it to the national grid ever since the year 2021.

Also read: Kenya Inks Over $4 Billion Deals to Boost the Kenya Geothermal Sector Infrastructure

Globeleq Menengai Geothermal Plant Inaugaration Date

Globeleq Menengai Geothermal Plant broke ground in the month of June this year and had expected to kick off the construction works of the plant this month. Staying on course, the plant was also foreseen to begin its electricity supply to the national grid by the year 2025.

Successful implementation of this project will greatly boost the share that geothermal energy holds in the national grid and fuel to a 100 per cent transition to clean energy mix. By the end of August Geothermal accounted for 45.3% of power and hydro accounted for 22.4%.

The other third power producer that holds a similar license to construct a similar plant to that of Globeleq is Ormat Technologies. Unfortunately, the project of Ormat is still pending as they are yet to attain financial closure with the funders.

The three firms were brought in by the Kenyan government in the year 2014 so as to establish geothermal plants, each with a capacity of 35MW and on a funding model of public-private partnership.