Expanding geothermal development in Kenya: a model for replication
Project snapshot - Menengai Geothermal Development Project
Country affected: Kenya and East African Rift Valley
Sector: Clean energy
AfDB related financing: USD 124 million from the AfDB and USD 25 million from the Climate Investment Funds
- expected additional generation of 400 MW steam power through IPPs, equivalent to 26 percent of current total installed generation capacity
Expected impacts upon completion:
- increased additional energy supply to meet the needs of 500,000 Kenyan households, 300,000 small businesses and 1,000 GWh for other businesses and industries
- 2 million tons of CO² per annum avoided
Situation: Although Kenya produces just enough power to meet its current demand for households and businesses tied to the grid, it is constantly plagued with power outages that cause not only inconveniences, but a loss of income for those businesses that depend upon it. A large part of the problem is the country’s reliance on hydropower, which fuels about half of Kenya’s installed capacity. Since there is no reserve margin for reduced hydropower generation in times of drought, the government must pay for emergency generation. Given its cost, it is not a viable long term solution. While only 13 percent of Kenya’s current power supply comes from geothermal energy, tapping the resource’s full potential could produce five times the population's entire demand.
Objectives: Since 2011, AfDB in partnership with the Climate Investment Funds, the French Development Agency, the European Investment Bank and the Government of Kenya, has been working to help diversify Kenya’s energy mix; provide clean, reliable, low-cost power; and strengthen the national grid by increasing national installed renewable power by approximately 10 percent, consistent with Kenya’s green growth vision. More specifically, the project aims to develop the Menengai geothermal steam field to produce enough steam for 400 MW of power that will be generated by the private sector as independent power producers.
Project’s specificity: The Menengai project is the first project to be approved under the Climate Investment Funds’ Scaling-up Renewable Energy Program for low-income countries. It has helped establish, and has been the first project to test, a new model to fast-track the development of geothermal resources in the East African Rift Valley. The model entails the financing of the early stage and high-risk activities mainly related to drilling by development finance institutions, such as the AfDB using concessional financing, which in turn paves the way for private investors to step in and convert the steam into power. The Bank is using this experience to contribute towards future geothermal plans in the Comoros, Djibouti, Ethiopia and Tanzania.
Testimonials from beneficiaries
“The electricity (generated) is expected to reduce the current price of electricity, which is KSh 16 per kilowatt per hour, to KSh 7-9... Cheaper electricity will spur economic activities both at local and national levels, resulting in job creation and improved livelihoods.”
Caleb Indiatsi, Geothermal Development Company Manager of Corporate Planning and Projects
“We hope that by 2030, ninety percent of Kenya’s population will have electricity in their homes all thanks to what you see happening behind us.”
Dr. Peter A. Omenda, General Manager, Geothermal Development Company
“Geothermal is to support our socio-economic transformation and also to improve the quality of our lighting energy everywhere, including rural Kenya.”
Patrick Nyoike, Former Permanent Secretary, Kenyan Ministry of Energy
“The geothermal footprint is very minimal. Emissions from geothermal, that is hydrogen sulfate and sulfur dioxide is so small that it has no effect on human beings and animals.”
Geoffrey Muchemi, Development Manager, Olkaria Geothermal Project, KenGen
“When there is no energy, there is nothing you can do. Electricity is a must. Without electricity, no work.”
Unnamed carpenter, Kenya