The Board of Directors of the African Development Bank Group has approved a loan of $16.5 million to support the development of the 35 MW OrPower Twenty-Two (OTTL) Geothermal Power Plant last November, a flagship renewable energy project that will increase Kenya's baseload generation and accelerate its clean energy transition.
The project is being developed by OTTL, an Independent Power Producer (IPP) in the Menengai geothermal field, just north of Nakuru Town, 180 km northwest of the capital, Nairobi. It is the third power plant in the field, complementing the operational 35 MW Sosian Menengai Geothermal plant, and the 35 MW Globeleq Menengai Geothermal project, of which the latter is still under construction with separate Bank financing.
Together, these projects will unlock the full 105 MW potential of the first phase of the Menengai geothermal field. The Menengai field itself was developed using an earlier $145 million financing to Geothermal Development Company (GDC) from the African Development Bank.
GDC, a government-owned entity, is responsible for drilling, producing, and supplying quality steam to the new power plant. Kenya Power and Lighting Company, also state-owned, will be the sole off-taker for the geothermal power plant, under a 25-year Power Purchase Agreement (PPA).
Beyond expanding generation capacity, the project will deliver affordable, sustainable baseload power to Kenya's national grid at one of the lowest tariffs in the country, helping to drive down overall electricity costs. When fully operational, the plant will generate approximately 301 Gigawatt hours of reliable, clean energy annually, strengthening supply stability. It will also play a critical role in diversifying Kenya's energy mix and reducing dependence on expensive diesel-fueled generation.
The plant is expected to deliver substantial climate benefits, including greenhouse gas emission avoidance of 1.9 million tonnes over the 25-year PPA period.
Wale Shonibare, Director of the Bank's Energy Financial Solutions, Policy, and Regulations Department said, "The Menengai model demonstrates the power of public-private collaboration, where government-led resource development unlocks private investment in geothermal generation, delivering mutual benefits: Geothermal Development Company secures stable revenues from steam sales, allowing it to monetise its significant investment in Menengai and reinvest in expanding geothermal development nationwide, while the private sector drives efficient power generation."
"We are honoured to be constructing the Orpower Menengai Geothermal Power Plant using independently developed, fully proprietary next-generation geothermal power technology thereby fulfilling our corporate mission of 'contributing to saving the planet'," OTTL Director, Qi Jingwen said. "Support by international financial institutions will enable deeper participation in the development of new green energy in Africa."
This project reinforces the Bank's energy priorities while advancing Kenya's broader development agenda by directly supporting Pillar I of the country's Mission 300 Energy Compact. By contributing to the country's goal of increasing geothermal capacity from 940 MW to 1,824 MW by 2030, it is also helping accelerate Kenya's transition to 100% clean energy through private sector investment.
The Bank's financing complements additional funding expected from the International Finance Corporation (IFC), bringing the project's total debt to $64.4 million out of a total estimated project cost of $91.9 million.
