Jun 2 2005
The European Investment Bank is to provide support for the extension of the Olkaria II geothermal power plant from resources of the Investment Facility. EIB President Philippe Maystadt and the Managing Director of KenGen, Mr. Edward Njoroge, signed a financing agreement today in Nairobi under which the EIB will lend EUR 32.5 million to Kenya Electricity Generating Company Ltd. (KenGen).
The extension of the Olkaria II power generation plant, located in the Rift Valley near Naivasha, consists of the drilling of additional wells, together with the extension of the existing substation and switchyard, and the installation of a 35 MW steam turbine in addition to the existing 70 MW generation capacity. The Bank has already supported the construction of the first geothermal power plant in the 1980s as well as the Olkaria II plant, commissioned in 2003.
The Olkaria II extension project has become possible because of the availability of greater underground steam resources than initially expected. It is part of Kenya’s Energy Sector Recovery Project, a comprehensive recovery programme for enhancing the power sector’s efficiency and long-term viability, designed with support from the World Bank.
The loan facility for the Olkaria II extension project will be made available directly to KenGen alongside a contribution from the World Bank (IDA) who will be lending via the Government of Kenya. Direct lending from EIB to KenGen through the Investement Facility reflects KenGen’s financial autonomy and is expected to encourage other financiers to build up direct relations with the company for funding further large investment projects needed to meet the country’s future growth in electricity demand.
http://europa.eu.int/