Kenyan Akiira project secures $1m grant from U.S. OPIC

45 MW Olkaria I geothermal power plant, Kenya (source:
Alexander Richter 12 Oct 2014

The developer of the Akiira geothermal power project in Kenya announces having secured a $1 million grant from the US Overseas Private Investment Corporation (OPIC) Africa Clean Energy Facility (ACEF), one of the Power Africa programs.

In a release this week, GreenMax Capital Advisors announced it has secured a $950,000 grant from the US Overseas Private Investment Corporation (OPIC) Africa Clean Energy Facility (ACEF), one of the Power Africa programs sponsored by the US Government, for Akiira One Ltd. (“AOL”), a Kenyan renewable energy project development firm, to support the final stages of project preparation for a 40MW geothermal energy project in Kenya. AOL is today owned by Kenyan, US and international investors.

The planned project will be constructed on land concessioned to AOL adjacent to the Olkaria geothermal fields, less than 100km outside of Nairobi. A first phase of 40MW will be followed by additional generation capacity totaling 140MW.

The grant will pay for a highly qualified set of international and Kenyan consultants to perform the final technical and legal work necessary to commence drilling for the geothermal resource early next year.

Robert Bunyi CEO of AOL, stated, “This grant is a major step in the implementation of the first fully commercially developed geothermal project in Kenya. While previous projects have benefited from early stage exploration and drilling funded by government and donors, AOL has tackled the steam field development with all its high risks, from scratch, entirely with private capital. Therefore the support of the US Government’s OPIC ACEF program is enormously valuable as a partnership with us to allow our risk capital to stretch a bit further and enable drilling to commence on schedule. GreenMax’s support has been invaluable in building our cooperation with OPIC and in finally securing the grant funding.”

Hezy Ram, CEO of Ram Energy Inc., a Wyoming based geothermal energy developer which is one of the founding shareholders of AOL, remarked, “We are grateful for the support of OPIC and the aggressive role that our government is playing to promote investment by American companies like ours in Africa’s clean energy sector. We believe Kenya offers strong opportunities for private investment in geothermal energy and a partnership with OPIC allows us to more effectively manage risks.”

Clifford J. Aron, President of GreenMax said, “We are delighted to be able to successfully arrange support for AOL through one of the cornerstone programs of President Obama’s Power Africa initiative. The US Government is providing valuable impetus for clean energy development in the power hungry nations of Sub Saharan Africa. GreenMax is proud to play a small role in helping Kenya meet its ambitious energy sector development goals.”

US OPIC is the development finance arm of the US Government, providing financing and political risk insurance for projects that promote local economic development with substantial US private sector involvement. The Africa Clean Energy Facility (ACEF), as one of the affiliated programs of Power Africa, provides grants to support the soft costs for preparation of renewable energy projects throughout Sub-Saharan Africa. Managed jointly by the US Department of State, OPIC and the US Trade & Development Agency, the ACEF serves in part to help projects achieve “bankability” for eventual financing by OPIC.

AOL is one of the first clean energy project developers in Kenya to obtain a concession for preparation of a geothermal energy project without government financial support in early stage exploration. The company, which is solely dedicated to development of the geothermal project at Akiira, was first established by a Kenyan clean energy development company as a joint venture with the US geothermal developer Ram Energy Inc. Danish Investment Firm DI Frontier Market Energy & Carbon Fund and Kenyan investment firm Centum Investment Company Ltd are in the process of joining the project as equity investors to provide sufficient financial resources for implementation.