Private power company Globeleq has executed an engineering, procurement and construction (EPC) contract and a long-term service agreement (LTSA) with Toyota Tsusho Corporation (TTC) for the 35 MW Menengai geothermal project in Nakuru county, Kenya.

Globeleq CEO Mike Scholey and TTC Africa Division COO Kazumasa Kimura signed the agreement in Tokyo.

Globeleq’s $108-million Menengai project will be the company’s first geothermal plant and the signing of these agreements is said to be a major milestone for the project after financing agreements were signed with the African Development Bank, the Eastern and Southern African Trade and Development Bank and Finnfund in December.

During the twenty-seventh Conference of the Parties, held in Egypt, in November, the Kenyan and UK governments jointly committed to fast-tracking green investment projects worth KSh500-billion in the country, which included the Menengai project.

The project will deliver clean, reliable and affordable baseload power to the national grid and also benefits from a letter of support issued by the Kenyan government.

Construction of the project is expected to begin during the first quarter of this year once financial close has been reached.

Globeleq will operate and maintain the power plant once it reaches commercial operations in 2025.  The steam turbine and generator will be manufactured by Fuji Electric.

“We are very excited to partner with TTC, which has an established presence in Africa and a proven 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.

“Having signed these key project agreements with TTC after achieving a fully committed financing about a month ago, we will now work with the government of Kenya to reach financial close and start construction as soon as possible,” Scholey comments.

Menengai is a greenfield geothermal project and part of the first phase of the wider Menengai complex, which is the second large-scale geothermal field being developed in Kenya after Olkaria.

Steam will be supplied to the project by Geothermal Development Company (GDC), a Kenya government-owned company under a 25-year project implementation and steam supply agreement.

Once operational, electricity will be sold to Kenya Power, the national distribution company, under a power purchase agreement for the same timeframe.

The project is expected to deliver clean and cheap baseload power to the national grid and enable GDC to monetise the available steam resources from the Menengai steam field.