Kenya: European Investment Bank pulls Funding of Akiira Geothermal Project

“After careful consideration and considering that the EIB has not made any progress on the Akiira Geothermal expansion project over the past three years, the EIB has formally decided not to pursue its investigation of the project,” said Joan Manuel Sterlin Balenciaga, Deputy Director of the EIB’s Communication Division.

This cancellation is a major blow for Akiira Geothermal and the entire country which had placed much hope on the project with the intent to connect many residents on the national grid.

According to their website, Akiira Geothermal Limted (AGL) has been incorporated as the project development company to execute the project. Marine Power Generation (MPG) are the holders of the geothermal exploration license and have shares in AGL. Ram Energy is the company with extensive technical expertise in geothermal development and also have a stake in AGL. The two main financial investors are Mvuke Power Limited (wholly owned by Centum Investments Company Ltd – CICL) and Frontier Akiira Holding Company Ltd. (owned by Frontier Investments).

The project was set to be carried out in several phases, the first of which would allow the construction of a 70MW steam power plant.

With the cancellation of EIB financing, Akiira Geothermal’s round table promises to be longer than expected. “We still have potential partners. The EIB is one of them. Once we have completed the evaluation of the resource and finally confirmed its exploitation, we will be able to fully engage with them on the details of the financing,” says Anthony Kahindi, Akiira Geothermal’s CFO. The company can still count on Overseas Private Investment Corporation (OPIC), the U.S. development finance agency, which has already released US $86m since 2014.

Author: Bryan Groenendaal

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