World Bank Backs Kenya Geothermal Plant

The World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) has provided political risk coverage at a cost of $88.3 million to Kenya’s Ol Karia geothermal power plant. MIGA’s guarantee protects foreign investments against the risks of transfer restrictions, war and civil disturbance, expropriation, and breach of contract.

Kenya continually faces severe power shortages, which has hampered economic growth. Only about 15% of the total population has access to electricity, with frequent blackouts and a large number of customers waiting for connections.

The base-load geothermal power plant, operating on a Build-Own-Operate basis, will in some measure address the power shortages in the country. At 95% capacity, the Olkaria III Geothermal Power Plant – developed, owned and operated by OrPower 4, Inc., a subsidiary of Ormat Technologies, Inc. – will produce more than 5.6 GWh of electricity.

"MIGA is committed to helping investors and developing countries reduce the harmful practices associated with global warming by supporting investments in renewable energy, energy conservation and increased efficiency," the Executive Vice President of MIGA Yukiko Omura said.

Christopher Ang, Underwriter at MIGA, explained that the Ol Karia III power project will play a bigger role in environmental conservation. "Geothermal power plants release about 1%-3% of the carbon dioxide (CO₂) emissions of a fossil fuel plant," he said. "Compared to a diesel plant generating the same amount of energy, this would avoid several million tons of CO₂ emissions over the life of the project," he said. The MIGA-supported project is set to provide clean energy from an indigenous energy source to the Kenyan people.