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Kenya - Menengai Geothermal Power Project - ESIA Summary

01-Aug-2011

This ESIA summary is for the Menengai Geothermal Power Project. The project is verified as category 1 in terms of AfDB’s ESAP. The Bank’s role is to provide a loan of UAC 80 million. The project proponent is the Geothermal Development Company Limited (GDC). GDC is a 100% government owned State Corporation operating under the Ministry of Energy. It was created as a special purpose company to accelerate the development of geothermal resources in Kenya. Its core activities include exploration, drilling, assessing and development of geothermal resources for power generation and other alternative uses. Prior to the establishment of GDC, the government of Kenya undertook surface scientific geothermal studies in Menengai area. Kenya’s power industry generation and transmission system planning is undertaken on the basis of a 20 year rolling Least Cost Power Development Plan (LCPDP) updated every year. According to the latest LCPDP, the country has an installed electricity generation capacity of 1,424 MW and a reliable capacity of 1,397MW under average hydrological conditions. The unsuppressed peak demand stands at 1,146MW. This leaves no reserve margin to allow for reduced hydro generation as is being experienced currently due to droughts and plant breakdowns. Geothermal power generation has a potential estimated at around 7,000 MW, is the choice of the Government of Kenya (GoK) for the future. The Menengai field alone (prospects have demonstrated that it is the best site for Kenya) could potentially produce up to 1,650 MW of power. It is against this background that the GoK officially requested the Bank on March 23rd 2011 to consider financing this Project, which involves the development of the Menengai geothermal field for up to 200 MW power as a first phase. For the remaining potential of 1450 MW in the Menengai site, GDC is discussing with the Chinese and Japan Bank for International Cooperation (JBIC) for possible financing in the tune of US$ 166 and 200 million respectively.

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