Nairobi-based African Trade and Investment Development Insurance (ATIDI) has played a unique role in supporting Globeleq’s ambitious 35 MW Menengai Geothermal Power Project in Kenya.
ATIDI’s provision of political risk insurance through its Regional Liquidity Support Facility (RLSF) is a significant step towards the success of the project.
The USD 117 million project, financed by the African Development Bank (AfDB), the Eastern and Southern African Development Bank (TDB), Finnfund, and equity from Globeleq, marks the first RLSF cover for a project in Kenya. The insurance will mitigate risks associated with payment default by Kenya Power & Lighting Company (KPLC) and Geothermal Development Corporation (GDC), ensuring financial stability crucial for investment in renewable energy projects.
Under a 25-year agreement, GDC will supply steam to the project, with electricity exclusively sold to KPLC. This long-term commitment ensures a stable and reliable source of renewable energy for Kenya, paving the way for a greener future. The project also benefits from a government-backed Letter of Support, solidifying its operational framework.
ATIDI CEO Manuel Moses expressed enthusiasm about the collaboration, emphasizing ATIDI’s commitment to sustainable development and renewable energy in Kenya and the broader region.
Globeleq’s Interim CEO Jonathan Hoffman lauded ATIDI for its pivotal role in facilitating the project, highlighting the RLSF’s significance in providing essential liquidity support against payment defaults and bolstering investor confidence in large-scale renewable ventures.
Kenya, the tenth ATIDI member state to join the RLSF initiative, aims to significantly enhance its renewable energy capacity, leveraging its natural resources to achieve clean and sustainable energy targets by 2030. The RLSF has supported seven renewable energy projects across Burundi, Malawi, Uganda, and Kenya, unlocking USD 323.7 million in financing and adding 171.3 MW to the region’s electricity generation capacity. This significant increase in capacity is a testament to the positive impact of the RLSF initiative on the region’s energy sector.
With an active private investment landscape and abundant renewable resources, including geothermal energy, Kenya is poised to expand its electricity generation from 3,078 MW in 2023 to 5,000 MW by 2030. ATIDI’s RLSF initiative is pivotal in stabilizing such projects, aligning with Kenya’s ambitious goal of achieving 100% clean energy by the decade’s end.
