Kenya:

AfDB Eases Investor Risk in 105 MW Menengai IPP Geothermal Project (ADFB)

The Board of Directors of the African Development Bank (AfDB) has approved an USD 12.7 million African Development Fund partial risk guarantee (ADF PRG) for the 105 MW Menengai Independent Power Producers project. The Menengai project will provide power to about 500,000 households and 300,000 businesses.

The ADF PRG will mitigate the risk to independent power producers (IPPs) – and the providers of debt financing to IPPs – of non-payment by state-owned enterprise Kenya Power and Lighting Company Limited under the Power Purchase Agreement (KPLC) and non-supply of steam by state-owned enterprise, Geothermal Development Company (GDC) under the Project Implementation and Steam and Supply and Agreement.

The Menengai geothermal steam field development project involves the supply of steam by the GDC to three power plants at the Menengai Geothermal field, as well as the purchase by KPLC of the power generated by those plants. The plants are to be financed, designed, constructed, installed, operated and maintained on a build-own-operate basis by three independent power producers – Sosian Menengai Geothermal Power Limited, QPEA GT Menengai Limited and OR Power Twenty-Two Limited.

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