South African bank invests in Menengai geothermal project in Kenya

Signing of credit investment agreement between Development Bank of Southern Africa and Sosian Energy (source: DBSA via LinkedIn)

The Development Bank of Southern Africa (DBSA) has announced a $68 million credit investment on Sosian Energy for the Menengai geothermal power project in Kenya. The investment will go towards increasing the capacity of the existing 35-MW geothermal power plant of the independent power producer (IPP), as well as settling debts related to the power plant’s initial construction phase.

The 35-MW geothermal power plant by Sosian Energy is the first power plant to generate electricity from the Menengai geothermal field, drilled and managed by state firm Geothermal Development Company (GDC). The plant started supplying to the local grid in August 2023 and was fully commissioned by November 2023.

“At Sosian, we are already producing electricity at the cheapest rate in Kenya’s history at 8 cents per kWh. We look forward to being supported by the funding effort so we can continue to provide electricity at a cheap rate to the people who need it the most,” said Kigen Moi, Director at Sosian Energy.

The power plant by Sosian Energy is the first of three power plants planned for the Menengai geothermal field. Work on the second power plant by Globeleq is already underway.

The DBSA is a government-owned development finance institution that aims to promote economic growth and regional integration for sustainable development projects across the African continent. The transaction is historic for being the first instance of an African-owned company being financed by an entirely African-owned development bank in the geothermal space. According to Mohan Vivekanandan of DBSA, the Bank will be providing the $68 million investment over 12 years.

Source: BusinessDay, Citizen Digital, and ODRI Media