ocean energy

EIB and French funds crucial for Kenyan geothermal plans

The European Investment Bank and the French Development Agency, Agence Française de Développement (AFD), have agreed to co-finance the expansion of the electricity generating capacity of Kenya’s Olkaria geothermal power plant by 280 MW.

The agreements were signed in Nairobi on 15 December by the French Ambassador, his Excellency Mr Etienne de Poncins; the Director of AFD in Kenya, Mr Yves Terracol; the Head of the European Investment Bank’s East & Central Africa Regional Representation, Kurt Simonsen; and the Deputy Prime Minister and Minister of Finance of the Republic of Kenya Mr Uhuru Kenyatta.

Energy Permanent Secretary Mr Patrick Nyoike also attended the event, alongside the CEO of KenGen Mr Eddy Njoroge, the CEO of Geothermal Development Company (GDC) Mr Silas Simuyu, and the Head of German financing agency KfW, Mr Piet Kleffmann. The three European financing institutions cooperate closely on the project under the Mutual Reliance scheme, part of an international effort to increase aid effectiveness through better co-ordination and harmonisation of development assistance.

This significant increase in geothermal generation capacity in Kenya will be undertaken by KenGen, the existing operator and will contribute to improving the country economic efficiency and the fight against climate change. Both AFD, the lead European financier for this project, and the European Investment Bank are financing the Olkaria I and IV generation plants.

Ramping up Kenya's geothermal capability

AFD will be providing a loan for €150 million with an additional interest rate subsidy equivalent to approximately €34 million. The European Investment Bank will lend €119 million with an additional interest rate subsidy equivalent to approximately €29 million. This subsidy element will be specifically targeted at assisting the Government of Kenya’s plans to combat climate change by further developing the country’s geothermal potential. The total cost of the project is estimated at €1,007 million, which in addition to the above financing will be co-financed by the Government of Kenya, KfW, JICA, the World Bank and KenGen.

“The European Investment Bank is committed to strongly supporting in Kenya’s energy sector, improving efficiency and quality of supply in electricity distribution, and increased electricity generation using non-weather dependent and non-fossil fuel geothermal power. Extension of the Olkaria geothermal plant reinforces Kenya’s position as a leading example of geothermal power generation and is an important diversification in Kenya’s electricity generation. The operation is part of the European Investment Bank’s climate action activities around the world.“ highlighted Plutarchos Sakellaris, European Investment Bank Vice President for Africa.

The European Investment Bank has a long-standing involvement in geothermal development in Kenya, and has co-financed the Olkaria power stations since the 1980s. Agence Française de Développement total financial commitments in the green energy sector will reach this year €236 million through KenGen, GDC and local banks to promote energy efficiency and renewable energies within the private sector.

Olkaria I was the first geothermal power station in Africa. It comprises 33 wells, 26 of which are currently in production. The 3 x 15-MW plant has enjoyed an average availability factor of 98% since commissioning and is connected to the national grid via a 132kV transmission line. Meanwhile, Olkaria II is Africa’s largest geothermal power station. It boasts 20 wells and has a boilerplate capacity of 2 x 32 MW.

For additional information:

Geothermal Development Company


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