Ormat Technologies, the Israeli giant that designs, develops, owns and operates geothermal and recovered energy-based power plants around the world, announced today that its wholly-owned subsidiary, OrPower 4, has secured funding to the tune of $105M for its geothermal project in Kenya, Olkaria III.

The lender is a group of European Development Finance Institutions (EDFIs) arranged by Deutsche Investitions- und Entwicklungsgesellschaft mbH (”DEG”). In addition to the German DEG, others in the lender group include: Société de Promotion et de Participation pour la Coopération Economique, Emerging Africa Infrastructure Fund Limited and Nederlandse Financierings Maatschappij Voor Ontwekkelingslanden N.V.

Furthermore, a portion of the funds provided for the loans will come from KfW Entwicklungsbank (KfW Development Bank) and from the European Financing Partners, a financing vehicle of 13 European Development Finance Institutions and the European Investment Bank (EIB).

The 48 MW capacity plant is located in the city of Naivasha, in the Rift Valley of Kenya.  Kenya is the first African country to use geothermal energy for electrical power generation, and the only country in Africa to exploit geothermal energy in a significant manner, with geothermal investigations in the Rift Valley dating back to 1956.

About 10% of Kenya’s current electricity system capacity (~ 1200 MW) comes from geothermal energy, although about the same percentage of the population has access to electricity at all.  Still, there are advanced plans by the Kenyan government to increase electricity generation from geothermal energy to 576 MW by 2017, and demand for electricity is expected to grow as infrastructure is developed further.

Ormat has already financed two phases of construction for the project, hovering at $150M from its own company resources.  The first phase included the drilling of wells to tap geothermal source at the location, while phase two expanded the project to 35 MW, meeting the project total of 48 MW. The electricity generated is sold to Kenya Power & Light Company (KPLC) under a 20-year Power Purchase Agreement. The Olkaria III power  plant  will save 120,000 tons of imported oil and mitigate approximately 200,000 tons of CO₂ emissions per year.

Related posts about Ormat:

Cleantech Investing in Israel: “Ormat Geothermal in Guatemala…”

Sustainable Business: “Ormat Adds 35MW to Kenya…”

Share/Save