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10 Feb 2023
Kenyan Utility Selects Contractor from Japan for $100 Million, 35MW Geothermal Project
Posted with permission from ESG Impact Zone.
Globeleq, the leading private power company in Africa, has executed an engineering, procurement and construction (EPC) contract and a long-term service agreement (LTSA) with Toyota Tsusho Corporation (TTC) for the 35MW Menengai geothermal project in Nakuru County, Kenya. Mike Scholey, CEO of Globeleq and, Kazumasa Kimura, COO for Africa Division of TTC signed the agreement in Tokyo earlier today (Feb 8).
Globeleq's $108 million Menengai project will be the company's first geothermal plant and the signing of these agreements is a major milestone for the project after financing agreements were signed in December 2022 with the African Development Bank, the Eastern and Southern African Trade & Development Bank and Finnfund.
During COP27, President Ruto of Kenya and Prime Minister Sunak of the UK jointly committed to fast-track green investment projects worth KES500 billion in the country, which included the Menengai project. The project will deliver clean, reliable and affordable baseload power to the national grid and also benefits from a Letter of Support issued by the Government of Kenya. Construction of the project is expected to commence during the first quarter of 2023 once financial close has been reached. Globeleq will operate and maintain the power plant once it reaches commercial operations in 2025. The steam turbine and generator will be manufactured by Fuji Electric.
Mike Scholey, Globeleq's CEO said: "We are very excited to partner with TTC, which has an established presence in Africa and a proven track record in Kenya's geothermal sector. Menengai will be Globeleq's first geothermal plant and will contribute to reducing the cost of power in the country. Having signed these key project agreements with TTC after achieving a fully committed financing about a month ago, we will now work with the Government of Kenya to reach Financial Close and start construction as soon as possible."
Richard Bielle, CEO for Africa Division of TTC and President of CFAO said: "We are very pleased to partner with Globeleq as their chosen EPC contractor for the Menengai geothermal project. TTC has been involved in Kenya since 1962 and, through our fully owned subsidiary, CFAO, we have a strong footprint in Renewable Power Development, and Mobility, Healthcare, Consumer and Infrastructure sectors. With our rich experience in the geothermal sector and our local communication network in Kenya, we, together with Globeleq, are excited to contribute to this project toward stable and affordable supply of electricity in Kenya."
Menengai is a greenfield geothermal project and part of the first phase of the wider Menengai complex, which is the second large-scale geothermal field being developed in Kenya after Olkaria. Steam will be supplied to the project by Geothermal Development Company (GDC), a Kenya government-owned company under a 25-year project implementation and steam supply agreement.
Once operational, electricity will be sold to Kenya Power, the national distribution company, under a power purchase agreement for the same timeframe. The project will deliver clean and cheap baseload power to the national grid and enable GDC to monetise the available steam resources from the Menengai steam field.
Photograph from GDC.
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