Kenya has received approval from the Climate Investment Funds' Clean Technology Fund for a $29.65 million concessional loan to co-finance up to two geothermnal projects in the African Rift Valley.
The CTF funds will enhance the projects' financial viability and commercial bankability, breaking down barriers to private investment. They will support up to two private-sector led geothermal generation projects structured as Independent Power Producers (IPPs), and will be implemented with African Development Bank (AfDB) support.
Kenya is already tapping geothermal energy resources in the Rift Valley region with the Menengai Geothermal Field project. This, and the latest two projects, will help to enhance the country's electricity generating capacity.
"Kenya is already demonstrating its ability to reshape its energy future by developing its vast geothermal resources through Menengai," said Joao Duarte Cunha, AfDB's Coordinator for CTF. "But it still faces market barriers to full deployment of its renewables. This infusion of capital will thus serve to build investor confidence and improve bankability of these vital resources.
"Furthermore, the success of the IPPs developed in this program can serve as a beacon for other countries looking to achieve similar green energy goals."
Transformation of the geothermal energy sector is a core part of Kenya's economic growth plan for its expanding and increasingly urbanizing population. In its "Vision 2030" the country identified energy and electricity as a key element of its economic transformation, with geothermal as the lead technology.
It is estimated that by 2020 the country's projected installed energy capacity will triple from 2177 MW to 6766 MW, with geothermal contributing around 2000 MW.