Economy
Toyota Tsusho bags Sh13.5bn deal to build geothermal plant in Nakuru
Friday February 10 2023
Toyota Tsusho bags Sh13.5bn deal to build geothermal plant in Nakuru. FILE PHOTO | AFP
UK-based private power firm Globeleq has contracted Toyota Tsusho Corporation (TTC) to construct a $108 million (Sh13.5 billion) Menengai Geothermal Project in Nakuru as part of the Sh500 billion green investment programmes agreed upon between President William Ruto and UK Premier Rishi Sunak.
The 35 megawatts (MW) plant, whose financing agreements were signed in December last year with the African Development Bank, the Eastern and Southern African Trade & Development Bank and Finnfund, will be Globeleq’s first in the country.
The deal was inked on Thursday by Globeleq CEO Mike Scholey and TTC Africa Division chief operating officer (COO) Kazumasa Kimura in Tokyo, Japan.
Also read: Toyota sells stake in Kenya IT firm after row with State
“We are very excited to partner with TTC, which has an established presence in Africa and a proven track record in Kenya’s geothermal sector. Menengai will be Globeleq’s first geothermal plant and will contribute to reducing the cost of power in the country,” said Scholey.
The construction of the plant is expected to commence during the first quarter of this year once a financial close has been reached.
Globeleq will operate and maintain the power facility once it reaches commercial operations in 2025.
According to the firm, the plant will help deliver clean, reliable and affordable baseload power to the national grid.
As a greenfield geothermal project, the plant is part of the first phase of the wider Menengai complex, which is the second large-scale geothermal field being developed in the country after Olkaria.
During the COP27 Egypt climate summit in November last year, President Ruto and Prime Minister Sunak agreed to fast-track six green projects worth Sh500 billion among them the Menengai project.
The investment programmes – in energy, agriculture and transport – are tailored to become flagship projects of the UK-Kenya Strategic Partnership, which is an ambitious five-year deal signed to unlock mutual benefits between the two countries.
The construction of the new plant comes at a time when Kenya Power has announced a proposal to increase electricity tariffs by up to 78 percent starting April 1 in a quest that will see the state-owned utility bag an additional Sh31.4 billion.
Read: Farmers get boost as Toyota joins fertiliser subsidy plan
It also comes at a time when a good chunk of industrial and domestic electricity consumers are increasingly leaning towards solar energy on account of ballooning bills and the unreliability of the national grid.
