“An eloquent illustration of this new model is the Menengai geothermal development project in Kenya, which the African Development Bank has recently supported with approximately 150 million U.S. dollars highly concessional financing from its own resources blended with climate investment funds,” Thierno Bah, AfDB senior power engineer, said in a statement received in Nairobi.
The Menengai Project is the first ever project to be approved under the Scaling-up Renewable Energy Program for low-income countries of the Climate Investment Funds.
Kenya has been facing unreliable supply of electricity highlighted by frequent power blackouts mainly blamed on higher demand than current installed capacity.
Even more worrying is the electricity tariff which is second highest in East Africa and analysts say harnessing power from geothermal is a capital intensive and high risk venture, which has scared away most, would be explorers.
The request for proposal for the Phase I of 400 MW Menengai Project will be issued in the first quarter of 2013 and thereafter evaluation will be undertaken to determine the four winning firms.
A total of 120 wells will be drilled for phase 1. Construction of phase 1 power plants is set to commence in 2014.
Menengai Phase 1 project will cost about 488 million U. S. dollars in drilling costs. Kenya’s Geothermal Development Company (GDC) said it has obtained adequate funding for this phase from the government and development partners.
The Menengai project, once completed, will have tremendous development impact for the Kenyan people by increasing the energy supply in the country by an amount equivalent to the current consumption needs of 500,000 Kenyan households, 300,000 small businesses and some 1,000 GWh for other businesses and industries.
The project will also displace around 2 million tons of CO2 per annum, hence significantly contributing to the fight against climate change. The bank has provided 145 million dollars to Kenya’s geothermal drilling at Menengai in the rift valley. The 400 MW power plant is expected to be operational by 2016.
The AfDB said it’s also focusing on developing the geothermal potential in Tanzania, as Tanzania has been identified as the next country having an important geothermal potential, with the appropriate institutional framework and being ready with concrete geothermal sites already identified.