The African Development Bank (AfDB) and Kenya-based Geothermal Development Company have launched the Menengai geothermal project in Nairobi.

The power project is designed to produce electricity for 500,000 households and offset two million tons of CO2 per annum.

The project will also cater to 300,000 small businesses and deliver a further 1000GWh to other businesses and industries on completion.

Located in the African Rift system, the Menengai project is expected to set the stage for investments to help meet the country’s demand for power, and transform the country into a competitive clean energy economy.

In December 2011, the power project received AfDB financing, consisting of a loan of $125m loan from the African Development Fund, AfDB’s concessionary or soft loan arm and a combined loan, and grant of $25m from the Scaling-Up Renewable Energy Program under the Climate Investment Funds, hosted by AfDB.