SSA – A total of seven Sub-Saharan Africa nations are set to benefit from €80 million (US$94.3 million) funding from the European Union investment arm European Investment Bank (EIB) to increase geothermal power production.
The European Investment Bank (EIB) approved the funding on 17th July 2021targeting private sector-led geothermal power projects in East Africa.
The funding will benefit projects in Kenya and 17 other countries, including Ethiopia, Rwanda, Tanzania, Uganda, Mauritius, Mozambique, and Madagascar.
“Eligible projects will typically include greenfield development and brownfield expansions, with proven geothermal resources,” said EIB.
“Investments in geothermal energy will help diversify baseload renewable electricity supply in the region and contribute to the reduction in greenhouse gas emissions compared to fossil-fuel based alternatives.”
The money is part of the global €4.1 billion (US$4.83 billion) that the bank has lined up for the private sector to accelerate renewable energy investment.
The funding is a boost to Kenya, which is in the race to cut further the share of expensive geothermal power in the national grid by raising the output of geothermal, wind, and hydropower sources.
Energy and Petroleum Regulatory Authority of Kenya data shows geothermal is the leading contributor of power to the national grid, accounting for 44.12 percent followed by hydropower at 26.98 percent. Thermal is below 13 percent.
This is in contrast to 2014 when the share of thermal was at a high of 34.49 percent due to erratic rains that reduced hydropower sources.
EIB has worked with Kenya since 1976 and supported different projects in including Olkaria geothermal plants and the Lake Turkana Wind Farm.
“Investments in geothermal energy will help diversify baseload renewable electricity supply in the region and contribute to the reduction in greenhouse gas emissions compared to fossil-fuel based alternatives”EIB
Information on the EIB website shows that the bank has so far spent €1.534 billion on projects in diverse sectors in Kenya including energy, agriculture, and health.
Projects in the energy sector including Lake Turkana Wind Power, Olkaria geothermal, and Kenya Power grid development account for Sh95.1 billion (US$879 million) or 49 percent of the total funding.
Still, in Kenya, Electricity producer Kenya Electricity Generating Company (Kengen) has also disclosed plans to invest as much as KSh216 billion (US$2 billion) in four new power plants in Kenya over the next five years.
The leading power generator is shifting focus from sources like hydroelectric power and thermal power to geothermal power.
Kengen is the largest energy generating company in East Africa and has also drilled over 310 geothermal wells since its establishment and supplied 1,818 Megawatts to the national grid.
Geothermal energy is becoming a major source of revenue for Kengen, through drilling projects in Kenya and neighboring countries like Ethiopia and Rwanda.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy, and more. SUBSCRIBE HERE