Kenyan government officials on Thursday signed letters of intent to support a wind power project, a key guarantee required by private investors willing to construct a US$805 million plant in Turkana, northern Kenya.
Willem Dolleman of Lake Turkana Wind Power Project (LTWP) signed the Letter of Support alongside the Government of Kenya, represented by Finance Ministry Permanent Secretary Joseph Kinyua and his Energy counterpart Patrick Nyoike, to guarantee funding for the project, according to an official statement issued in Nairobi on behalf of the investors.
The government’s signature of the letter of support has been a key requirement for the financiers willing to invest in the project, seen as the first major international investment of its kind in green energy.
Kenya Power and Lighting company CEO Joseph Njoroge, also took part at the signing. The key power utility firms pledge support to the project.
This will enable the project to enter the final phase of financing.
The guarantee the investors want is an assurance that the government will purchase power from the plant for at least 30 years.
The wind project, which will be the largest single private investment in Kenya’s history, amounting to Ksh 70 billion has the additional backing from the African Development Bank, Kenya Power and Vision 2030. (1US$ = 87 Kenya Shillings.)
Aldwych International, KP&P Africa, Industrial Fund for Developing Countries (IFU), Wind Power (Vestas) and Norwegian Investment Fund for Developing Countries (Norfund) hope to start construction later this year.
“The project has been under private development since 2005 and that is in itself a remarkable testimony to the stability and soundness of the Kenyan electricity sector as well as the environment for Independent Power Producer (IPP),” said Carlo Van Wageningen, Chairman, LTWP.
Failure to secure the government’s backing was criticised as a key setback to the project, outlined as a flagship vision 2030 project.
The project aims to provide 300MW of reliable, low cost wind power to the Kenya national grid, equivalent to approximately 20% of the current installed electricity generating capacity.
The wind farm site, covering 40,000 acres (162 square km), is located in Loyangalani District, Marsabit West County, in north-eastern Kenya, approximately 50km north of South Horr Township.
“In addition to providing reliable cost effective power the project will bring numerous macroeconomic, community and social benefits for the region, which is one of the poorest regions in Kenya,” said Van Wageningen.
The project will comprise 365 wind turbines, each with a capacity of 850 kW, the associated overhead electric grid collection system and a high voltage substation.
The project also includes upgrading of the existing road from Laisamis to the wind farm site, which is partly financed by the Dutch Government and is a distance of approximately 204km.
The project will build an access road network in and around the site for construction, operations and maintenance.
The Kenya Electricity Transmission Company (Ketraco), with concessional funding from the Spanish Government, is constructing a double circuit 400kv, 428km transmission line to deliver the LTWP electricity along with power from other future plants to the national grid.