Kenya has received Sh2.9 billion boost to finance its drive for geothermal energy production in the Rift Valley. Transformation of the geothermal energy sector is a core part of Kenya’s economic growth plan for its expanding and increasingly urbanising population.
The funding from the Climate Investment Funds’ Clean Technology Fund (CIF-CTF), is a concessional loan secured with support from the African Development Bank (AfDB). It will co-finance up to two geothermal projects as the country aims to reach the targeted 5,000 megawatts of power with minimal mix from thermal sources. The funding is part of the CTF’s Dedicated Private Sector Programme (DPSP), designed to finance projects that can deliver development results, have an impact on the private sector, help investment at large scale and can be deployed rapidly and efficiently.
AfDB coordinator for CTF Joao Duarte said the concessional finance programme for geothermal generation will build on the energy advancements already underway in the successful development of the country’s showcase Menengai Geothermal Field. “Kenya is already demonstrating its ability to reshape its energy future by developing its vast geothermal resources through Menengai. 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 programme can serve as a beacon for other countries looking to achieve similar green energy goals,” Mr Duarte said.
In 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 2,177 MW to 6,766 MW, with geothermal contributing around 2,000 MW.
The government has put in place various measures meant to ready itself for this eventuality with various plans underway including expanding transmission and distribution networks to deliver power to customers in partnership with the private sector.