Wind farm project turns a new leaf

A wind mill in Marsabit County.   Photo/JOSEPH KANYI

In Summary

• Eight years after the first feasibility study was conducted in Loyangalani District, Marsabit County, the largest wind farm in the region is poised for take-off after risk guarantees were finalised in November.
• In October, the Government of the Netherlands, through the African Development Bank (AfDB), agreed to fund construction of the road to a tune of Sh1.1 billion.
• The project is expected to create 2,500 job opportunities during the 32-month construction period, followed by about 200 full-time jobs during operations.

By John Njiru
More by this Author

Eight years after the first feasibility study was conducted in Loyangalani District, Marsabit County, the largest wind farm in the region is poised for take-off after risk guarantees were finalised in November.

The Sh70 billion Lake Turkana Wind Power Project (LTWP) is expected to break ground in the early months of this year after various financiers pledged their support that will see Kenya diversify from its over-reliance on hydroelectric power.

The initial steps include construction of the 200km road from Laisamis to Sirima, location of the farm, to facilitate timely transportation of wind turbines to the site.

Also, construction of a 428km transmission line that will feed the electricity produced to the national grid will start.

FUNDING FROM AfDB

In October, the Government of the Netherlands, through the African Development Bank (AfDB), agreed to fund construction of the road to a tune of Sh1.1 billion.

“We are delighted that this project will move forward with the continued support of the Government of Kenya, Kenya Power, the African Development Bank, and other partners,” LTWP’s chairman Carlo Van Wageningen said when the government endorsed the project, which unlocked commitments from financiers.

In November, the European Union stepped in and advanced the project Sh3.5 billion investment grant to plug the remaining gaps in finances.

“Electricity is absolutely essential right now for meeting demand from Kenyan farmers, businesses and households. We are proud to step-in and make the necessary funding available to keep the construction of the Turkana wind project on course,” said EU’s ambassador to Kenya Lodewijk Briet after the deal.

This was a month after AfDB approved a partial guarantee on the project at a tune of Sh2.3 billion through its Partial Risk Guarantees (ADF PRG) instrument.

The risk mitigation facility covers private lenders and investors against the risk of a possible government failure to meet contractual obligations to a project.

“This ADF PRG will promote foreign direct investment in Kenya and crowd in private financing for power generation.

"Also, by reducing the risk profile for the sponsors and lenders to the Lake Turkana project, the PRG will accelerate financial closure and reduce the overall cost of capital to the project,” said Kurt Lonsway, AfDB’s acting director in charge of energy, environment and climate change department during the agreement.

Overall, the AfDB Group has injected a loan of Sh13.5 billion to the Lake Turkana project since 2009

WATTAGE EXPECTED BY NEXT YEAR

LTWP will see 365 wind turbines, each with a capacity to produce 850kW, erected on the 40,000 acre farm.

Project managers foresee production of the first 50 megawatts to start early next year and the wind farm fully operational at 300 megawatts by 2016 if logistic issues are handled according to plan.

LTWP consortium consists of Dutch firm KP&P BV Africa, Aldwych International, Vestas Wind System A/S, Norwegian Investment Fund for Developing Countries and Industrialisation Fund for Developing Countries.

Vestas will be involved in the supply of the wind turbines while Aldwych will oversee the construction and operations.

The project is expected to create 2,500 job opportunities during the 32-month construction period, followed by about 200 full-time jobs during operations.