NAIROBI, Kenya, June 28 – The African Trade and Investment Development Insurance (ATIDI) has vowed to support the 35 MW greenfield geothermal project in the country through its Regional Liquidity Support Facility (RLSF).
The project, which will be implemented in partnership with Globeleq Africa Limited, an operator of electricity generation in Africa, will cover the risk of payment default by public entities, including Geothermal Development Bank (GDC) and Kenya Power and Lighting Company (KPLC), by RLSF.
The project, the first to be considered for RLSF cover in Kenya, is valued at USD117 million, with financing provided by the African Development Bank (AfDB), the Eastern and Southern African Development Bank (TDB), the Finish Fund for Industrial Cooperation (Finnfund), and equity from the project owners, Globeleq.
The proposed RLSF policy will cover the risk of payment default by the national utility KPLC and GDC, a government-owned company formed to accelerate the development of geothermal resources in the country.
RLSF, a joint initiative of ATIDI, the KfW Development Bank, and the Norwegian Agency for Development Cooperation (Norad), is a credit enhancement instrument available to renewable energy independent power producers (IPPs) that sell the electricity generated by their projects to state-owned power utilities.
ATIDI CEO Manuel Moses revealed that the liquidity cover will help promote renewable energy solutions across Kenya and the region.
Kenya’s power sector benefits from an active private sector and boasts abundant renewable energy resources, with hydro, wind, and geothermal projects dominating its energy mix.
“We are proud to collaborate with Globeleq, KPLC, GDC, and the Government of Kenya on this transformative project. This underscores our commitment to fostering sustainable development and promoting renewable energy solutions across Kenya and the region,” said Moses ATIDI CEO.
He added, “Together, we are driving positive change and advancing Kenya’s energy transition. Given Globeleq’s huge and growing portfolio of renewable energy projects across the continent, we look forward to building on this partnership.”
Globeleq Interim CEO Jonathan Hoffman assured the firm’s commitment to offering support to Kenyan companies undertaking renewable energy projects.
“This imaginative product from ATIDI, KfW and Norad provides critical liquidity support against payment default allowing companies like Globeleq to invest with confidence,” said Hoffman Globeleq CEO.
Steam will be supplied to the project by GDC under the terms of a 25-year power implementation and steam supply agreement, while the electricity generated will be sold exclusively to KPLC under a power purchase agreement for the same duration.
Kenya, which is the host country of ATIDI’s headquarters, became the tenth ATIDI member state to sign the RLSF Memorandum of Understanding after Benin, Burundi, Côte d’Ivoire, Ghana, Madagascar, Malawi, Togo, Uganda, and Zambia.
