Kenyan wind power project gets financial backing for power line - CNBC Africa

Kenyan wind power project gets financial backing for power line

East Africa

by Reuters 0

The 623 million euro project is the largest single wind power scheme in Africa. PHOTO: Student Energy

This is after the African Development Bank backed financing to build a transmission line to connect it to the national grid, the project’s director said.

The wind farm located in Kenya's remote north will have an installed capacity of 310 megawatts (MW) to help plug a power supply shortfall, which has led to frequent blackouts that hamper industry in East Africa’s biggest economy.

The 623 million euro project, the largest single wind power scheme in Africa, has been delayed in part due to the risks associated with building a 428 km transmission line connecting the 365-turbine wind farm to the grid. The project was initially due to be completed in 2011.

(READ MORE: Kenya’s biggest wind power project receives 75 billion shilling loan)

Under an agreement signed on Monday, the African Development Bank gave Kenyan state-owned firm Ketraco, which is contracted to build the line, a partial risk guarantee worth 20 million euros to complete it.

Carlo Van Wageningen, director of Lake Turkana Wind Power, said the guarantee ensured his company would be compensated for the electricity generated even if the transmission line is not completed by the time the project starts producing power.

If the transmission line is erected on time, the wind farm will begin producing its first 50 MW of power after 27 months and go fully on line five months after that, he said.

Van Wageningen said that later this month his company could start drawing down on loans to pay its contractors, paving the way for construction to begin in early 2015.

“It has been a long journey,” Henry Rotich, Kenya’s secretary for finance, said at the signing of the guarantee. “I hope now we have resolved everything.”

Kenya’s government has said it wants to expand its power generation capacity by 5,000 MW by 2017 from about 1,700 MW now to reduce tariffs, ease power shortages and cut costs of doing business.

(READ MORE: GE to start building 100 MW wind farm in Kenya next year)

Kenya Power, the country’s sole electricity distributor, at present serves about 2.8 million customers out of a population of 40 million. Kenya relies heavily on renewable energy such as hydro power and geothermal for its electricity.

Comments