EIB cancels loan to Akiira geothermal project in Kenya

The Akiira geothermal project in Kenya is in jeopardy after its largest lender, the European Investment Bank (EIB), recently canceled its financing. The European financial institution was to provide a loan of US $190m to Akiira Geothermal, the ad hoc company created for this project located in the Olkaria region of the Rift Valley in western Kenya.

“After careful consideration and considering that the EIB has not made any progress on the Akiira Geothermal expansion project over the past three years, the EIB has formally decided not to pursue its investigation of the project,” said Joan Manuel Sterlin Balenciaga, Deputy Director of the EIB’s Communication Division.

This cancellation is a major blow for Akiira Geothermal and the entire country which had placed much hope on the project with the intent to connect many residents on the national grid.

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Akiira geothermal project

Akiira geothermal project is being developed by a consortium composed of Centum Investments Company, Marine Power Generation, DI Frontier Energy Carbon Fund (a Danish energy fund) and Ram Energy. The aim is to produce 140MW by exploiting the heat from the subsoil of the Rift Valley. The project was to be carried out in several phases, the first of which would allow the construction of a 70MW steam power plant.

With the cancellation of EIB financing, Akiira Geothermal’s round table promises to be longer than expected. “We still have potential partners. The EIB is one of them. Once we have completed the evaluation of the resource and finally confirmed its exploitation, we will be able to fully engage with them on the details of the financing,” says Anthony Kahindi, Akiira Geothermal’s CFO. The company can still count on Overseas Private Investment Corporation (OPIC), the U.S. development finance agency, which has already released US $86m since 2014.