(Ecofin Agency) - Japan and Kenya signed a funding agreement according to which Japan is to invest $408 million in Olkaria V georthermal plant. It is a 140 MW-generating infrastructure whose construction should start in July 2016 and last two years. Kenya Electricity Generating Company (KenGen) is in charge of construction.

“The loan we just got will serve to finance the construction of a power station that will help us valorize the Olkaria geothermal site by adding 140 MW to national grid,” said Henry Rotich, secretary to Cabinet at National Treasury.

Kenya, which has substantial geothermal and hydraulic resources, plans to raise its power capacity to 6,700 MW by 2017, from 2,500 MW currently. As for KenGen, one of Kenya’s main power suppliers, it aims to increase installed capacity by 720 MW by 2020. The project has been estimated at $2 billion.

Gwladys Johnson