Loan for Eastern and Southern African Trade and Development Bank Based on Export Credit Line
Supporting Japanese Companies’ Exports of Geothermal Power Generation Equipment to Kenya

• Region: Africa
• Infrastructures
• Environment
• Export Loans

1. The Japan Bank for International Cooperation (JBIC; Governor: HAYASHI Nobumitsu) signed on October 8 a loan agreement totaling up to USD8.64 million (JBIC portion) with Eastern and Southern African Trade and Development Bank (TDB), a regional development financial institution in Africa, based on the export credit line^*1 established in May 2019. The loan is co-financed with Mizuho Bank, Ltd., bringing the total co-financing amount to USD14.4 million. The co-financed portion is covered by insurance from Nippon Export and Investment Insurance (NEXI).
     
2. The loan is intended to provide, through TDB, the funds necessary for Globeleq Menengai Geothermal Limited, a Kenyan company that is to own and operate a geothermal power plant in the Menengai region in Kenya, to purchase geothermal power generation equipment from Toyota Tsusho Corporation (TTC) and its Kenyan subsidiary CFAO Kenya Limited (CFAO Kenya). TTC and CFAO Kenya have been awarded engineering, procurement, and construction work for the geothermal power plant as a single package, and Fuji Electric Co., Ltd. will manufacture the main component, including the geothermal steam turbine and power generator.
     
3. This loan supports the export of geothermal equipment by Japanese companies, thereby contributing to maintaining and strengthening the international competitiveness of Japanese industry. On June 5, 2024, the outline of a new strategy looking ahead to 2030 was approved by the Ministerial Meeting on Strategy Relating to Infrastructure Export and Economic Cooperation. The outline states that the Japanese government needs to set goals for 2030 in the new strategy, which replaces the Infrastructure System Overseas Promotion Strategy 2025. The goals include achieving growth by tapping into emerging markets in the Global South and leveraging opportunities created by social changes, such as green transformation (GX) and decarbonization. With the loan, which is in line with the Japanese government's policies, JBIC will help Japanese companies exporting geothermal equipment to Kenya in collaboration with TDB.
     
4. Also, in the Tunis Declaration released at the Eighth Tokyo International Conference on African Development (TICAD 8) in August 2022, the government of Japan called for the promotion of Japan’s Green Growth Initiative with Africa (GGA), which aims to achieve structural changes toward low greenhouse gas (GHG) emissions and green growth that reflects the different circumstances of each African country through public-private partnership in order to mobilize financial resources for climate adaptation and mitigation. This loan is also in line with the policies of the Japanese government regarding engagement with Africa.
     
5. As Japan’s policy-based financial institution, JBIC will continue to help Japanese companies expand their businesses in Africa by drawing on its various financial facilities and schemes for structuring projects, performing its risk-assuming function, and financially supporting the further development of economic relations between Japan and African nations through continued collaboration with TDB Group.
     

Note

1. *1 
   See press release on May 27, 2019.