AfDB Approves $16.5m Loan for Kenya’s OrPower Menengai Geothermal Project

The loan was approved in November and forms part of the Bank’s continued support for geothermal development in Kenya, one of Africa’s leading geothermal markets.

The Board of Directors of the African Development Bank Group has approved a $16.5 million loan to support the development of the 35 megawatt OrPower Twenty-Two (OTTL) Geothermal Power Plant, a flagship renewable energy project set to strengthen Kenya’s baseload power generation and accelerate its clean energy transition.

The loan was approved in November and forms part of the Bank’s continued support for geothermal development in Kenya, one of Africa’s leading geothermal markets.

Expanding Power Generation in the Menengai Geothermal Field

The project is being developed by OTTL, an Independent Power Producer (IPP) operating in the Menengai geothermal field, located just north of Nakuru Town, approximately 180 kilometres northwest of Nairobi.

The OrPower Twenty-Two facility will become the third power plant in the Menengai field, complementing the operational 35 MW Sosian Menengai Geothermal Power Plant and the 35 MW Globeleq Menengai Geothermal 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 itself was developed using earlier financing of $145 million provided by the African Development Bank to the Geothermal Development Company (GDC), underscoring the Bank’s long-term commitment to geothermal energy development in Kenya.

Public–Private Collaboration Model

GDC, a state-owned entity, is responsible for drilling, producing and supplying high-quality steam to the OrPower Twenty-Two plant. Kenya Power and Lighting Company (KPLC), also government-owned, will serve as the sole off-taker under a 25-year Power Purchase Agreement (PPA), ensuring long-term revenue stability.

According to the Bank, the Menengai project illustrates the effectiveness of a public–private partnership model in geothermal development.

“The Menengai model demonstrates the power of public-private collaboration, where government-led resource development unlocks private investment in geothermal generation, delivering mutual benefits,” said Wale Shonibare, Director of the Bank’s Energy Financial Solutions, Policy and Regulations Department.

He added that the model allows GDC to monetise its substantial upfront investment through steam sales, while enabling reinvestment in expanding geothermal development across the country.

Affordable, Reliable and Clean Baseload Power

Beyond increasing installed capacity, the OrPower Twenty-Two project is expected to deliver affordable and sustainable baseload electricity to Kenya’s national grid at one of the lowest tariffs in the country. This will help reduce overall electricity costs and improve supply reliability.

Once fully operational, the plant is expected to generate approximately 301 gigawatt-hours of clean, reliable electricity annually. It will also play a critical role in diversifying Kenya’s energy mix and reducing dependence on costly diesel-fired power generation.

Climate and Environmental Benefits

The geothermal plant is expected to deliver significant climate benefits, including the avoidance of an estimated 1.9 million tonnes of greenhouse gas emissions over the 25-year duration of the PPA.

OTTl Director Qi Jingwen said the project reflects the company’s commitment to climate action and technological innovation.

“We are honoured to be constructing the OrPower Menengai Geothermal Power Plant using independently developed, fully proprietary next-generation geothermal power technology, thereby fulfilling our corporate mission of contributing to saving the planet,” Jingwen said.

He added that support from international financial institutions will enable deeper private-sector participation in Africa’s green energy transition.

Supporting Kenya’s Clean Energy Ambitions

The project directly supports Pillar I of Kenya’s Mission 300 Energy Compact and aligns with the country’s goal of increasing installed geothermal capacity from 940 MW to 1,824 MW by 2030. It also advances Kenya’s ambition to transition to 100% clean energy through increased private-sector investment.

The African Development Bank’s financing complements additional funding expected from the International Finance Corporation (IFC), bringing total project debt financing to $64.4 million, against an estimated total project cost of $91.9 million.

Officials said the OrPower Twenty-Two project represents another major step in positioning Kenya as a continental leader in renewable energy and sustainable power generation.