Kenya's $870 Million Lake Turkana Wind Project Fully Financed

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The backers of Kenya's 300-megawatt (MW) Lake Turkana Wind Power Project (LTWP) recently signed financial agreements in Nairobi, following several years in the concept, feasibility, development and funding stages. The agreements should see the project completed and operative in early 2017. The project was first mooted in 2005.

"The signing of the over-$870 million in financing agreements represents a major breakthrough to actualizing the biggest clean power energy project in Africa," said Tshepo Mahloele, chief executive officer of Harith General Partners (Johannesburg), during the signing ceremony.

The financial backers were brought together by the African Development Bank (AfDB), with a total of $870 million in financing agreements. The European Investment Bank gave $260 million, the single highest contribution.

The project site will cover 40,000 acres in Marsabit County. There will be 365 turbines of 850 kilowatts (kW) each, with an associated overhead electric grid collection system and a high-voltage substation.

The Kenya Electricity Transmission Company Limited (KETRACO) is currently constructing a 400-kilovolt (kV), 428-kilometer transmission line to deliver power from the LTWP--as well as power from future plants--to the national grid.

Power produced by LTWP will be bought at a fixed price by Kenya Power during a 20-year period under a signed power purchase agreement (PPP). The project is part of Kenya's "Vision 2030" initiative, and is seen as a transformative project in terms of the impact its development will have on the arid northern areas of Kenya, the electricity sector, and the national economy as a whole. It is the largest project to be undertaken in the country since independence in 1963.

LTWP is expected to generate $150 million annually in foreign currency savings through fuel displacement costs. It also will include a tax contribution of $27 million annually and $548 million over the life of the investment.

LTWP Chairman Carlo Van Wageningen said at the ceremony: "Nine years sitting at desks preparing paper work, nine years of studies have been really long. We are people of action and we will act. We want to be in the field and break ground as soon as possible, because we want to bring this change to Kenya."

AfDB is the lead financial backer; others include The Standard Bank of South Africa (OTC:SGBLY) (Johannesburg), Nedbank (OTC:NDBKF) (Johannesburg), FMO, Proparco (France), East African Development Bank, PTA Bank (East Africa), EKF, Trioidos (international) , DEG (Germany) and the Netherlands government.

For related information, see October 4, 2013, article - African Development Bank Provides $27 Million PRG for Turkana Wind Power Project.

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