The African Development Bank (AfDB) has approved a $16.5 million loan to support the development of the 35-megawatt OrPower Twenty-Two (OTTL) geothermal power plant in Kenya’s Menengai geothermal field.
The loan was approved by the AfDB Group’s Board of Directors and will finance part of the project’s construction in the Menengai area, north of Nakuru town, about 180 kilometres northwest of Nairobi.
The project is being developed by OrPower Twenty-Two Limited, an independent power producer operating within the Menengai geothermal field.
The OTTL plant is the third geothermal power project planned under the first development phase of the Menengai field.
Public-private development model
Speaking on the project structure, Wale Shonibare, Director of the Bank’s Energy Financial Solutions, said the Menengai model assigns separate roles to government institutions and private developers.
He said the model allows the Geothermal Development Company (GDC) to earn revenue from steam sales.
“The Menengai model demonstrates the power of public-private collaboration, where government-led resource development unlocks private investment in geothermal generation,” Shonibare said.
“Geothermal Development Company secures stable revenues from steam sales, allowing it to monetise its investment in Menengai and reinvest in geothermal development nationwide, while the private sector focuses on power generation,” he added.
Meanwhile, the OTTL plant will operate alongside the 35 MW Sosian plant, already supplying the grid, and the 35 MW Globeleq plant, currently under construction with separate AfDB financing.
Together, the three projects are designed to deliver 105 MW of generation capacity from the first phase of the Menengai geothermal field.
Steam supply and power purchase structure
The Menengai geothermal field was developed by GDC, a government-owned entity responsible for drilling geothermal wells and supplying steam to power plant developers.
According to the Bank, development of the field was supported by about $145 million in earlier.
Under the project structure, GDC will supply steam to the OTTL power plant. Electricity generated will be sold to Kenya Power and Lighting Company under a 25-year Power Purchase Agreement (PPA).
Kenya Power, which is also state-owned, will serve as the sole off-taker of the electricity produced by the plant.
AfDB noted that arrangement separates geothermal resource development from power generation. It allows private developers to invest in power plants without taking on geothermal exploration and drilling risks.
Expected output and climate impact
The OTTL geothermal power plant is expected to generate about 301 gigawatt hours of electricity annually once fully operational.
The Bank estimates that the project will lead to the avoidance of around 1.9 million tonnes of greenhouse gas emissions over the 25-year duration of the PPA. The estimate is based on the displacement of fossil-fuel-based electricity generation.
Geothermal power provides continuous electricity output. The Bank said the project will add baseload generation to Kenya’s national grid.
It also said the plant will reduce reliance on diesel-fuelled power generation, which is typically used during periods of electricity supply shortfall.
International financing package
The loan is part of a broader financing package for the OTTL project, with additional funding expected from the International Finance Corporation (IFC), bringing total project debt to $64.4 million of the estimated $91.9 million project cost.
Commenting on the financing, Qi Jingwen, Director of OrPower Twenty-Two Limited, said international support was important to the project.
“We are honoured to be constructing the OrPower Menengai Geothermal Power Plant using independently developed, fully proprietary next-generation geothermal power technology,” Jingwen said.
“Support by international financial institutions will enable deeper participation in the development of new green energy in Africa,” he added.
Supporting Kenya’s geothermal expansion plans
The project aligns with Pillar I of Kenya’s Mission 300 Energy Compact, which focuses on expanding access to reliable and clean electricity, while the country currently has about 940 MW of installed geothermal capacity.
The Menengai projects contribute to the country’s target of increasing geothermal capacity to 1,824 MW by 2030, mainly through private sector participation supported by development finance.
The OTTL project adds to ongoing geothermal developments in Kenya’s Rift Valley, where Menengai remains one of the country’s largest state-developed geothermal fields.
