21 December 2007 – The World Bank’s Multilateral Investment Guarantee Agency (MIGA) are to provide political risk cover for a Kenyan power plant.
"The US$88.3 million guarantee will support investments into a geothermal power plant with a combined capacity of 48MW" MIGA said in a press release.
Explains Christopher Ang, underwriter at MIGA, “Geothermal power plants release about 1 to 3 percent of the carbon dioxide (CO2) emissions of a fossil fuel plant. At 95 percent 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. 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.”
The project will provide clean energy to the Kenyan people, using indigenous energy sources and will hopefully encourage economic growth in a country which only has a 15% electrification rate.
The power plant will operate on a Built-Own-Operate (COO) basis, using an Ormat Energy Converter to harness the geothermal energy.
A 20 year power purchase agreement has already been agreed with the Kenya Power and Lighting Company Limited.
The MIGA guarantee protects the investors against "the risks of transfer restriction, war and civil disturbance, expropriation, and breach of contract."
“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,” says Executive Vice President of MIGA, Yukiko Omura. “We are pleased that our political risk insurance was able to facilitate the use of renewable energy sources in Kenya and reduce the adverse impacts of climate change” the statement concluded.