Kenya — African Development Bank approves USD 16.5 million loan for OrPower Twenty-Two Menengai geothermal plant

Mechanism

The African Development Bank Group approved a USD 16.5 million loan to OrPower Twenty-Two (OTTL), an independent power producer developing the third geothermal plant in Kenya's Menengai field (north of Nakuru, ~180 km northwest of Nairobi), following the operational 35 MW Sosian Menengai plant and the under-construction 35 MW Globeleq Menengai plant (separately AfDB-financed). The new 35 MW OTTL plant is expected to generate roughly 301 GWh/year once operational, with Kenya Power and Lighting Company (state-owned) as sole off-taker under a 25-year Power Purchase Agreement. AfDB's USD 16.5 million tranche sits within a USD 64.4 million total debt package — complemented by expected International Finance Corporation co-financing — against an estimated USD 91.9 million total project cost. AfDB frames the loan as accelerating Kenya's clean-energy transition and strengthening baseload generation; projected lifetime benefit is ~1.9 million tonnes of avoided GHG emissions over the 25-year PPA period.

Global Trade Alert logs the loan as a "certainly harmful" state-linked lending-support intervention on the standard multilateral-development-bank-financing template (the same pattern as the AfDB/KCB Kenya trade-finance package and the AfDB Nigeria SAPZ tranche already in the register): below-market development-bank debt to a named commercial project is treated as a potential trade- and competition-distorting subsidy. Severity is set at 2, in line with other single-project multilateral development-bank loans of this size in the register.

Downstream implications

• Third AfDB-financed plant in the Menengai geothermal field, continuing a pattern of

concessional multilateral debt underwriting Kenyan baseload power capacity.

• Kenya Power and Lighting Company's 25-year PPA locks in the off-take structure typical

of Kenyan IPP geothermal projects financed by development banks.

• No specific third-country trade impact is named in the primary source; GTA does not

list affected countries for this intervention.

Open questions

• Loan pricing/terms relative to market rates are not disclosed in the primary source.
• IFC co-financing amount and timing (to complete the USD 64.4 million debt package) are

not yet finalised in public disclosures.