The Multilateral Investment Guarantee Agency (MIGA), part of the World Bank Group, has issued Ksh 6.4 billion (US$49.5 million) in guarantees to Globeleq Africa Limited of the United Kingdom for its investments in two renewable energy projects in Kenya—Globeleq Menengai Geothermal Limited and Malindi Solar Group Limited.
The guarantees, which cover the risk of contract breaches, will extend for up to 20 years for the Menengai Geothermal project and 17 years for the Malindi Solar project. These investments are expected to enhance Kenya’s renewable energy capacity and lower electricity costs.
Boost for Kenya’s Clean Energy Transition
The Menengai Geothermal project is a 35-megawatt greenfield power plant currently under construction. Once completed, it will supply electricity to Kenya Power under a 25-year Power Purchase Agreement (PPA).
The Malindi Solar project, a 40-megawatt plant, has been operational since December 2021 and sells its electricity to Kenya Power under a 20-year PPA. Both projects are backed by a Letter of Support from the Government of Kenya, providing a safeguard against payment defaults arising from political events.
“The World Bank Group Guarantee Platform is delighted to be adding two new clean energy projects to our Kenyan portfolio,” said Hiroshi Matano, MIGA Executive Vice President. “By providing guarantee coverage, we are helping bring reliable, clean, and affordable energy that drives economic growth and supports the broader objectives of Mission 300 by increasing private sector investment and the supply of renewable energy.”
Lowering Costs and Reducing Fossil Fuel Dependence
Kenya is aiming for 100% clean energy by 2030, and these projects will help advance the country’s low-emissions development path. With geothermal energy already accounting for 41% of Kenya’s installed capacity, the Menengai project will reduce reliance on expensive thermal power generated from heavy fuel oil. The competitive tariffs for these projects are also expected to bring down the average cost of electricity generation in the region.
“We are thrilled to receive MIGA’s support for our Menengai Geothermal and Malindi Solar projects,” said Jonathan Hoffman, interim CEO of Globeleq. “These guarantees are crucial in mitigating risks and ensuring the successful implementation of these clean energy initiatives. By harnessing geothermal and solar power, we are contributing to Kenya’s sustainable energy goals and providing reliable and cost-effective electricity to the grid.”
Strengthening Private Investment in Energy
MIGA’s guarantees play a critical role in attracting foreign investment into Kenya’s energy sector by addressing concerns about market risks. The projects align with the World Bank Group’s strategy to mobilize private financing for development and support climate-friendly infrastructure.
The World Bank Group is also collaborating with the African Development Bank and other partners on Mission 300, an ambitious initiative aimed at connecting 300 million people to electricity in Sub-Saharan Africa by 2030.
These investments reinforce Kenya’s position as a regional leader in clean energy while ensuring a sustainable and affordable electricity supply for households, businesses, and industries.
