Republic of Kenya / Loan Insurance for 35MW Menengai Geothermal Project (Insurance for Loans under Export Credit Line Set for TDB Bank)

Nippon Export and Investment Insurance (NEXI; Chairman and CEO: Atsuo Kuroda) decided to provide insurance for a loan by a Japanese bank to finance the EPC project of Menengai geothermal power plant in the Republic of Kenya (“Kenya”) by Toyota Tsusho Corporation (“Toyota Tsusho”), awarded by Globeleq Menengai Geothermal Limited. NEXI has also provided Export Credit Insurance for the export transactions of Toyota Tsusho, the EPC (Engineering, Procurement, and Construction) contractor for this project¹.

The loan is intended to provide the funds necessary for this 35MW geothermal power plant project in Menengai region in Kenya, to purchase geothermal power generation equipment from Toyota Tsusho and its Kenyan subsidiary, CFAO Kenya Limited, under the credit line set up between Japan Bank for International Cooperation (“JBIC”) and Eastern and Southern African Trade and Development Bank (“TDB”) on May 2019². The loan is co-financed by Mizuho Bank, Ltd. and JBIC (total co-financing amount of USD 14.4 million), and NEXI will provide insurance for Mizuho Bank’s loan portion of USD 5.76 million.

The borrower of this project, Globeleq Menengai Geothermal Limited, was established in Kenya by Globeleq, a British IPP, as a special purpose company to carry out the project. It will enter into a steam supply agreement with Geothermal Development Company, power purchase agreement with Kenya Power and Lightning Company, and will operate the geothermal power plant with the support by the Kenyan government. Moreover, Fuji Electric Co., Ltd. will manufacture and supply major components such as geothermal steam turbine and power generator for this project.

Kenya is one of Africa’s leading renewable energy countries, with approximately 90% of the country’s total electricity generation covered by renewable energy. This power plant is expected to promote the further expansion of geothermal power, which serves as a baseload power source in Kenya, and contribute to improving the quality of life for the people of Kenya and the sustainable development of the Kenyan economy, while also playing a role in the country’s decarbonization efforts.

NEXI’s support for this loan and the export of geothermal power plant components by Japanese companies, will contribute to maintaining and strengthening the international competitiveness of Japanese industry. The project is also in line with the Japanese government’s Infrastructure System Overseas Promotion Strategy 2025, which identifies the promotion of accelerating transitions toward a decarbonized society as one of its objectives.

As an official export credit agency of Japan, NEXI will continue to actively support exports from Japanese companies as well as the global decarbonization efforts.

Contact:
Power Group
Structured and Trade Finance Insurance Department
Tel: #81-(0)3-3512-7340