The European Investment Bank (EIB) has indicated that it’s preparing a €155 loan package for the 70MW Akiira Geothermal Project in Naivasha, in Nakuru County, Kenya.
The project includes a consortium of investors from Kenya, Denmark and the US.
EIB East Africa head, Catherine Collin, said “The loan is under commercial terms but will be lower than 10% interest in euros after risk pricing,”
The Akiira project has an estimated cost of $380 million and is being financed through a mix of debt (70%) and equity (30%), according to the executives.
Media reported that the project has a power purchase agreement for Sh9.5/ kWh ($0.09237 kWh) signed in August 2015 with electricity distributor Kenya Power.
Akiira was expected to start power generation by December 2016; however, it suffered delays after exploration of its initial wells yielded less steam, prompting further drilling and tests.
The exploration process began in August 2015, targeting to drill up to 15 steam wells, each with an average capacity of 5MW, bringing the expected installed capacity to about 75MW.
Centum Investments owns a 37.5% equity stake in the Akiira consortium, with the remaining 62.5% owned by American firms Ram Energy, Marine Power, and Danish company, Frontier Markets.
The Centum consortium is expected to contribute 30% of the project’s cost of $380 million while the rest will be funded through commercial loans.