Kenya has secured a KES1.2 billion (about $16.5 million) loan to finance the development of the 35 MW OrPower Twenty-Two Geothermal power plant in Menengai as the country scales the generation of renewable energy.

The financing from the African Development Bank (AfDB) will enhance the development of geothermal project that is anticipated to increase Kenya’s baseload generation and accelerate the country’s transition to clean energy. 

The project is being developed by OTTL, an Independent Power Producer (IPP) in the Menengai geothermal field, just north of Nakuru City.

“We are honoured to be constructing the Orpower Menengai Geothermal Power Plant using independently developed, fully proprietary next-generation geothermal power technology thereby fulfilling our corporate mission of ‘contributing to saving the planet. Support by international financial institutions will enable deeper participation in the development of new green energy in Africa,” stated OTTL director Qi Jingwen. 

This will be the third power plant in the field, complementing the operational 35 MW Sosian Menengai Geothermal plant, and the 35 MW Globeleq Menengai Geothermal project, of which the latter is still under construction.

The Menengai field itself was developed using an earlier Sh18.7 billion ($145 million) financing to Geothermal Development Company (GDC) from the AfDB.

GDC is a government-owned entity that is charged with drilling, producing, and supplying quality steam to the new power plant. Kenya Power and Lighting Company will be the sole off-taker for the geothermal power plant, under a 25-year Power Purchase Agreement (PPA).

Wale Shonibare, Director of the Bank’s Energy Financial Solutions, Policy, and Regulations Department said, “The Menengai model demonstrates the power of public-private collaboration, where government-led resource development unlocks private investment in geothermal generation, delivering mutual benefits: Geothermal Development Company secures stable revenues from steam sales, allowing it to monetise its significant investment in Menengai and reinvest in expanding geothermal development nationwide, while the private sector drives efficient power generation.”

Together, these three projects will unlock the full 105 MW potential of the first phase of the Menengai geothermal field. 

Apart from expanding generation capacity, the project will deliver affordable, sustainable baseload power to Kenya’s national grid at one of the lowest tariffs in the country. This will greatly help to drive down overall electricity costs.

Once fully operational, the plant will generate approximately 301 Gigawatt hours of reliable, clean energy annually, strengthening supply stability. It will also play a critical role in diversifying Kenya’s energy mix and reducing dependence on expensive diesel-fueled generation. 

The plant is expected to deliver substantial climate benefits, including greenhouse gas emission avoidance of 1.9 million tonnes over the 25-year PPA period.

This project supports Kenya’s broader development agenda by aligning with Pillar I of the Mission 300 Energy Compact. It contributes to the national target of expanding geothermal capacity from 940 MW to 1,824 MW by 2030, while accelerating the country’s transition to 100% clean energy through private sector investment.

Additionally, the Bank’s financing complements additional funding expected from the International Finance Corporation (IFC), bringing the project’s total debt to $64.4 million out of a total estimated project cost of $91.9 million.

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