African Trade & Investment Development Insurance (ATIDI) will extend liquidity cover for Globeleq Africa’s 35 megawatts (MW) Globeleq Menengai Geothermal Project in Kenya.

Nairobi-headquartered ATIDI said in a press statement that the liquidity cover will be extended via the Regional Liquidity Support Facility (RLSF), its joint initiative with KfW Development Bank and the Norwegian Agency for Development Cooperation (Norad).

RLSF is a credit enhancement instrument available to renewable energy Independent Power Producers (IPPs) that sell the electricity generated by their projects to state-owned power utilities. The policy will cover the risk of payment default by the national utility, Kenya Power & Lighting Company (KPLC) and Geothermal Development Corporation (GDC) – a government-owned company formed to accelerate the development of geothermal resources in Kenya.

Globeleq Menengai Geothermal Project is valued at $117 million with financing being provided by the African Development Bank (AfDB), the Eastern and Southern African Development Bank (TDB), the Finnish Fund for Industrial Cooperation (Finnfund), and equity from the project owners, Globeleq.

Steam will be supplied to the project by GDC under the terms of a 25-year power implementation and steam supply agreement, whilst the electricity generated will be sold exclusively to KPLC under a power purchase agreement for the same duration. The Project Company also benefits from a Letter of Support from the Government of Kenya.

To date, RLSF policies have been approved in support of 7 renewable energy projects in Burundi, Malawi, Uganda and now in Kenya; enabling total financing of $323.7 million and a total installed electricity generation capacity of 171.3MW, courtesy of $20.6 million worth of cover under the RLSF portfolio.

(Editing by Anoop Menon) (anoop.menon@lseg.com)

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