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Menengai geothermal project reaches financial close

Construction activities for the geothermal project will begin shortly. (Image source: Globeleq)

Globeleq, a leading independent power company, has announced it has reached financial close on the US$117mn 35MW Menengai geothermal project in Nakuru County, Kenya

The announcement was made alongside the company’s project partner, Geothermal Development Company (GDC). The project will become Globeleq’s first geothermal plant and will deliver clean, reliable and affordable baseload power to the national grid. It was also allow GDC to monetise the available steam resources from the Menengai steam field – steam will be supplied to the project by GDC as part of a 25-year project implementation and supply agreement. 

In the announcement Globeleq stated that it would shortly supply a notice to proceed on the engineering, procurement and construction contractor, Toyota Tsusho Corporation and their subsidiary CFAO Kenya Limited. 

Construction activities will begin in the coming weeks and it is expected to reach commercial operations by 2025. Globeleq will operate and maintain the plant at this stage and will sell electricity to Kenya Power under a 25-year power purchase agreement. 

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 decarbonise 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.”

The announcement is part of Globeleq’s plans to expand its footprint in Kenya where it is also planning to expand its 52MWp Malindi Solar PV plant with additional solar capacity and battery storage.

Mike Scholey, Globeleq’s CEO, commented, “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.”

Globeleq is also bolstering its portfolio outside Kenya. On the same day as the Menengai announcement the company also stated that it had completed the acquisition of a 52.5% stake and a 22.5% stake in the 41MW Central Solar de Mocuba solar PV power plant (Mocuba) in Mozambique from Scatec ASA and KLP Norfund respectively. Elsewhere in the country, the company is constructing a major 450MW gas-to-power project at Temane which is expected to produce power at the end of 2024. 

Scholey remarked, “2024 promises to be a critical year for Globeleq in Mozambique as the Temane gas-to-power plant moves towards commercial operations and the Namaacha project, the country’s first wind power project, is expected to reach financial close by mid-2024.”

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