Plans to set up a 400MW geothermal power generating station at Menengai has received a boost, following approval for its funding by the African Development Bank (AfBD).
In an interview with the Daily Nation, Gabriel Negatu AfDB's regional director, confirmed that at the end of last year, the board approved a Sh10.2 billion loan to fund the project. The funds are expected to be released by March this year.
"Funding for the Menengai project has already been approved by the board and we expect to see a lot of activity around March this year," said Mr Negatu.
The project is being financed by the Government of Kenya, AfDB and other development partners to the tune of more than Sh68 billion.
Meanwhile, the State-owned Geothermal Development Company (GDC) charged with exploration of geothermal power, says work has began for the first phase of the project, which will involve setting up of four power generating plants, each with an output of 100MW.
"Drilling in Menengai is ongoing with two rigs owned by GDC purchased through funding from the Government of Kenya. AfDB funding will, therefore, boost the 400MW project. GDC will purchase 2 rigs, drilling materials and one modular power plant with the AfDB funds," read a statement from GDC.
The European Investment Bank has contributed Sh3.06 billion, Climate Investment Bank Sh3.4 billion, French Development Agency (AFD) Sh8.5 billion and the World Bank Sh850 million.
"With funding from government, the committed funds from donors as well as pledges, GDC can confidently say that we have all the funds we need to develop the Menengai phase one 400MW project," added the statement.
Kenya has an estimated geothermal power potential of between 7,000 MW and 10,000 MW but only 200 MW is exploited despite an annual increase in power demand of about 8 per cent.