Two Japanese banks in partnership with the Trade and Development Bank of East and Southern Africa (TDB) have loaned British company Globelec $14.4 million (Sh1.86 billion) to finance the purchase of power generation equipment for the upcoming 35 MW geothermal power plant in Meningai, Nakuru County. .
Under the joint financing plan, the Japan Bank for International Cooperation (JBIC) will provide $8.64 million (Sh1.1 billion) and Mizuho Bank $5.76 million (Sh744 million) to the Trade and Development Bank, which will loan the amount back to Globeleq Menengai Geothermal Limited. .
Japanese state-owned insurance company Nippon Export and Investment (NEXI) will secure Mizuho’s share of the loan.
Globelec began construction on its Sh15 billion factory in June 2023, with construction starting earlier this year. The company contracted with Japanese Toyota Tsusho and its Kenyan subsidiary CFAO Kenya Limited to build the plant. The factory is expected to be completed in mid-2025.
Fuji Electric Co., Ltd. Ltd of Japan is on contract to manufacture key machinery, including geothermal steam turbines and power generators.
“The loan is intended to provide the necessary funds… to purchase geothermal power generation equipment from Toyota Tsusho and its Kenyan subsidiary CFAO Kenya Limited, under the line of credit established between JBIC and TDB in May 2019,” NEXI said in a statement.
“The loan is jointly financed by Mizuho Bank Co., Ltd. and Japan Bank for International Cooperation, and NEXI will provide insurance for Mizuho Bank’s loan portion.”
The Globelec plant is one of three geothermal plants earmarked for the first phase of the Menengai Power project, which targets 105MW from three independent power producers – each constructing a 35MW plant.
The other two developers awarded contracts to construct steam power facilities are Sosian Menengai Geothermal Power Limited and Orpower Twenty-Two Limited. Sosian completed construction of its station last year and is currently supplying power to the national grid.
The companies buy steam from the state-owned Geothermal Energy Development Corporation, which has drilled more than 50 wells in the area.
GDC supplies steam to the power plants under a 25-year implementation and supply agreement, while Globelec also has a 25-year power purchase agreement with Kenya Power.
Globelec, which is majority owned by British International Investment Plc (BII), has acquired an interest in the Menengai plant after acquiring a controlling stake in Quantum Power East Africa in 2021. Quantum Power was awarded the contract to build the plant in 2013.
The company also has a 52 MW solar power plant in Malindi, which began supplying power to the grid in 2021.
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