The African Development Bank (AfDB) Group has approved a USD 16.5 million loan to support the development of a new geothermal power plant at Kenya’s Menengai field, reinforcing the country’s clean energy transition and expanding its baseload generation capacity.
The financing will support the 35 MW OrPower Twenty-Two (OTTL) Geothermal Power Plant, a major renewable energy project located north of Nakuru. Once completed, the plant will supply reliable and affordable electricity to Kenya’s national grid. It represents the third power generation facility within the Menengai geothermal complex, complementing existing and ongoing developments supported through earlier financing rounds.
Under the project structure, the state-owned Geothermal Development Company (GDC) will provide geothermal steam to the facility, while the Kenya Power and Lighting Company (KPLC) will serve as the sole off-taker under a 25-year power purchase agreement. The plant is expected to generate approximately 301 gigawatt-hours of electricity annually, helping to reduce reliance on costly and carbon-intensive diesel generation while improving overall energy security.
Strategic Context
Kenya holds one of the largest geothermal resource bases in Africa, making geothermal energy central to its long-term power strategy. Expanding geothermal capacity supports national objectives to increase clean energy supply, lower emissions, and stabilize electricity costs for households and industrial users.
The Menengai development aligns with Kenya’s broader energy diversification strategy, strengthening resilience against fuel price volatility and climate-related disruptions. The AfDB loan also complements additional debt expected from development partners, including the International Finance Corporation (IFC), bringing total project debt to approximately USD 64.4 million within a facility valued at nearly USD 92 million.
Market and Energy Sector Impact
The transaction reflects Africa’s growing emphasis on clean, dispatchable baseload power infrastructure. Unlike intermittent renewable sources, geothermal energy provides consistent power output, enhancing grid stability and reducing dependence on imported fossil fuels.
For Kenya, continued geothermal expansion supports industrial growth by delivering more reliable and competitively priced electricity. Regionally, the project demonstrates how structured public-private partnerships and blended finance can mobilize capital for large-scale renewable energy investments across Africa.
Outlook
Once operational, the OrPower Menengai plant is expected to contribute meaningfully to lowering power costs and advancing Kenya’s long-term clean energy objectives. Ongoing support from development finance institutions such as the AfDB and IFC will remain critical as African countries scale renewable energy solutions that enhance energy access, support climate commitments, and drive sustainable economic growth.
