AfDB Approves $16.5m Loan for Kenya Geothermal Project
The African Development Bank Group has approved a loan of $16.5 million to support the development of the 35-megawatt OrPower Twenty-Two (OTTL) Geothermal Power Plant, strengthening Kenya’s clean energy transition and expanding affordable baseload electricity supply.
The project, approved by the Bank’s Board of Directors in November, is being developed by OrPower Twenty-Two Limited, an independent power producer operating in the Menengai geothermal field, located north of Nakuru Town, about 180 kilometres north-west of Nairobi.
Once completed, the OTTL plant will become the third geothermal power facility in the Menengai field, alongside the operational 35 MW Sosian Menengai plant and the 35 MW Globeleq Menengai project, which is currently under construction with separate African Development Bank financing. Together, the three plants will unlock the full 105 MW potential of the first development phase of the Menengai geothermal field.
The geothermal field was initially developed by the government-owned Geothermal Development Company (GDC) with support from earlier African Development Bank financing amounting to $145 million. GDC is responsible for drilling, producing and supplying steam to the power plants, while Kenya Power and Lighting Company will purchase electricity from the OTTL plant under a 25-year Power Purchase Agreement.
Beyond increasing generation capacity, the project is expected to deliver reliable and affordable baseload power to Kenya’s national grid at one of the country’s lowest electricity tariffs. When fully operational, the plant will generate approximately 301 gigawatt hours of clean energy annually, helping to stabilise supply, reduce reliance on diesel-powered generation and lower overall electricity costs.
The project will also deliver significant climate benefits, with estimated greenhouse gas emission reductions of 1.9 million tonnes over the life of the Power Purchase Agreement.
Wale Shonibare, Director for Energy Financial Solutions, Policy and Regulation at the African Development Bank, said the Menengai project demonstrates the value of strong public-private collaboration in renewable energy development.
“The Menengai model shows how government-led resource development can unlock private investment in geothermal power generation,” Mr Shonibare said. “This approach creates mutual benefits, allowing public institutions to recover and reinvest capital while the private sector delivers efficient and reliable power.”
OTTL Director Qi Jingwen welcomed the Bank’s support, noting that the project uses next-generation, proprietary geothermal power technology. He said backing from international financial institutions would enable deeper private sector participation in Africa’s green energy development.
The financing supports Kenya’s broader development agenda and aligns with Pillar I of the country’s Mission 300 Energy Compact. It also contributes to Kenya’s goal of increasing geothermal capacity from 940 MW to 1,824 MW by 2030 as the country works towards achieving 100 per cent clean energy.
The African Development Bank’s loan is expected to be complemented by additional funding from the International Finance Corporation, bringing total project debt financing to $64.4 million out of an estimated total project cost of $91.9 million.
