Globeleq acquires a majority stake in geothermal project in East Africa

Renewable energy investment and development company, Globeleq, has acquired a majority stake in Quantum Power East Africa. The company essentially took over the 35 MW private geothermal power project in Menengai, Kenya. Globeleq is an Africa-focused energy company, owned 70% by UK’s CDC and 30% by the Norwegian state-owned investment company Norfund.

Globeleq is one of three Independent Power Producers (IPPs) developing the 105 MW Menengai geothermal project under a steam supply contract with Geothermal Development Company (GDC) in Kenya. The acquisition comes at a time three private geothermal power projects failed to kick off construction owing to funding challenges. These IPP projects were initially scheduled to start operations in December 2016. This transaction by Globeleq will certainly be crucial in advancing the Menengai II geothermal project.

Quantum Power has the contract for the development of one of the three 35 MW geothermal power projects as part of the wider Menengai geothermal field development. Orpower 22, a consortium between Ormat Technologies Inc, Symbion Power LLC and Civicon Ltd will develop the Menengai I geothermal project. The Menengai III geothermal power plant is being built by Sosian Energy. 

These IPPs will sell their output to Kenya Power (KPLC) under a long term Power Purchase Agreement (PPA).  Chinese company Kaishan Renewable Energy Development, a subsidiary of Zhejiang Kaishan Compressor, will build Sosian Energy’s Menengai III geothermal power plant.

Quantum Power reported that the investment cost for the development of its Menengai plant is around $98 million. The company has a 25-year PPA with Kenya Power, for a price of Sh5.50 (USD 0.05) / kWh of electricity to the company and another Sh2.20 (USD 0.02) / kWh to GDC for the steam

The IPPs are expected to invest US$210 million in all three projects. Kenya Electricity Transmission Company Ltd (Ketraco) has completed the 132-kV substation for the power plants.