World Bank backs Mombasa LPG import terminal with US$23.2m loan

KENYA – Mombasa Gas Terminal, a company specialising in the importation, storage, and marketing of liquified petroleum gas (LPG), has received a World Bank-IFC financing facility for the construction of the first phase of an LPG import and storage terminal that will enable a sustained increase in the uptake of clean energy fuels in Kenya.

The funding was announced by the International Finance Corporation arm of the World Bank on 2nd June 2021 and comes after the company secured regulatory approvals from the national and county governments.

“We confirm that we have received a facility from the World Bank for the US$23.2 million Phase One of our bulk LPG import and storage terminal. The second phase will complete the storage capacity to 22,000 metric tons or more with an annual throughput capacity of 400,000 metric tons per annum. This project will underpin Kenya’s ambitious goal for sustainable economic development. We are aiming to complete construction of Phase One and begin operations within six months.” said Mombasa Gas Terminal (MGT) Managing Director Eng. Julius Riungu.

The new terminal will include a direct mooring access for very large-sized LPG carriers, storage and associated infrastructure that will have multiple loading points for transfer of LPG to road and rail transport.

Several global LPG market players are in discussion to participate in long-term partnership with the project.

The second phase will complete the storage capacity to 22,000 metric tons or more with an annual throughput capacity of 400,000 metric tons per annum and this project will underpin Kenya’s ambitious goal for sustainable economic development. We are aiming to complete construction of Phase One and begin operations within six months”

Julius Riungu – Managing Director, Mombasa Gas Terminal

Eng. Riungu said that the LPG import terminal would serve both industrial and domestic users through dealer networks and will support the Kenya government’s Big Four agenda by powering manufacturing, enhancing food security, improving healthcare, and complimenting affordable housing efforts through reticulated gas systems.

The project is aligned to Kenya’s target of achieving universal access to modern cooking solutions by 2030 in line with the Sustainable Development Goal number 7 (SDG 7).

These solutions include LPG, electricity, biogas, bioethanol and improved solid fuel cookstoves.

A recent study published by the country’s Ministry of Energy in 2019 shows that 93.2% of the rural population still rely on solid fuels as their primary fuel source.

The study also shows that households using LPG as the primary fuel still use, on average, 42% of the amount of charcoal used by households that depend on charcoal as the primary fuel.

The increased use of clean fuels is designed to support the move by the Government to restore Kenya’s forest cover to 10% up from the current 7% by directly reducing the demand for charcoal and firewood as the primary sources of energy, especially at household levels.

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