Kenya's first RLSF-covered geothermal project

On the opening day of the Africa Energy Forum (AEF), African Trade & Investment Development Insurance (ATIDI) and Globeleq Africa Limited announced their partnership for the 35MW Globeleq Menengai Geothermal Project

This collaboration involves providing liquidity cover via the Regional Liquidity Support Facility (RLSF).

RLSF, a credit enhancement tool available to renewable energy Independent Power Producers (IPPs) selling electricity to state-owned power utilities, is a joint initiative by ATIDI, the KfW Development Bank, and the Norwegian Agency for Development Cooperation (Norad). This support is extended to ATIDI member countries that sign the RLSF Memorandum of Understanding.

RLSF: Catalysing energy transformation

The Menengai project, the first in Kenya to receive RLSF cover, is valued at US$117mn. It is financed by the African Development Bank (AfDB), the Eastern and Southern African Development Bank (TDB), the Finish Fund for Industrial Cooperation (Finnfund), and equity from Globeleq. The RLSF policy will mitigate the risk of payment defaults by Kenya Power & Lighting Company (KPLC) and the Geothermal Development Corporation (GDC), the latter being a government entity promoting geothermal resource development in Kenya. GDC will supply steam to the project under a 25-year agreement, while the electricity produced will be sold exclusively to KPLC over the same period. Additionally, the project has received a Letter of Support from the Government of Kenya.

Kenya, which hosts ATIDI’s headquarters, is the tenth member state to sign the RLSF MoU, joining Benin, Burundi, Côte d’Ivoire, Ghana, Madagascar, Malawi, Togo, Uganda, and Zambia. The MoU fosters collaboration between ATIDI and its member states to identify, develop, and implement renewable energy projects, leveraging each country’s resources to generate clean energy and strengthen power infrastructure. RLSF policies have so far supported seven renewable energy projects across Burundi, Malawi, Uganda, and now Kenya, facilitating US$323.7mn in financing and 171.3MW in total electricity generation capacity, backed by US$20.6mn in cover under the RLSF portfolio.

Kenya's power sector, enriched by an active private sector and abundant renewable resources such as hydro, wind, and geothermal, is set to expand its electricity generation capacity from 3,078MW in 2023 to 5,000MW by 2030. Geothermal projects are crucial to this expansion and the country’s renewable energy targets. ATIDI’s RLSF initiative plays a key role in ensuring the stability and feasibility of these projects, aiding Kenya in its quest to achieve 100% clean energy by 2030.

Manuel Moses, CEO, remarked, "We are proud to collaborate with Globeleq, KPLC, GDC, and the Government of Kenya on this transformative project. This partnership, coming so soon after the signing of the RLSF MoU in February 2024, underscores our commitment to fostering sustainable development and promoting renewable energy solutions across Kenya and the region. Together, we are driving positive change and advancing Kenya's energy transition. Given Globeleq’s huge and growing portfolio of renewable energy projects across the continent, we look forward to building on this partnership.”