Power costs to drop with new clean energy deal

Kenya Power CEO Ben Chumo (right) and Craftskills Wind Energy International director Kenneth Namunje during the signing of the deal. Kenya Power last week signed a deal to purchase clean energy from Kipeto Energy Limited in an effort to bring down the cost of electricity. (PHOTO: WILBERFORCE OKWIRI/ STANDARD)

Kenya Power last week signed a deal to purchase clean energy from Kipeto Energy Limited in an effort to bring down the cost of electricity. This will inject an additional 100MW power into the national grid as part of the 5,000MW of additional power generation required to project Kenya as a competitive business hub.

The Power Purchase Agreement (PPA) will run for 20 years. The farm, located near Kiserian, is Kenya’s second largest wind power producer after the 300MW Lake Turkana Wind Power Project in Marsabit.

Wind power is cost-effective and environmentally-friendly as it reduces the need for diesel-powered plants. Renewable energy accounts for 80 per cent of the power mix in Kenya today. “Apart from connecting more Kenyans to electricity, this project will ensure Kenya has sufficient power as wind power is readily available,” said Kenya Power CEO Ben Chumo.

The Kipeto wind project is funded by several multinationals including the Overseas Private Investment Corporation (OPIC), the US government’s development finance institution.

OPIC is the principal lender with an injection of $232.6 million (Sh23.26 billion). Others include the African Infrastructure Investment Fund (AIIF) that holds long-term equity investments in a diversified portfolio of infrastructure and infrastructure-related assets across sub-Saharan Africa.

Included in the deal, too, is the International Finance Corporation, a member of the World Bank Group and the largest global development institution focused exclusively on the private sector in developing countries. The 60 turbines will be provided by General Electric.

The wind power project is yet another way in which local landowners can diversify land use in the region marked by dry spells. There are about 61 landowners on the wind farm and another 18 along the transmission line who have signed agreements with the project developers. Some 80 households on 15 parcels of land will have to move out to pave way for the project. The farm will sit on 70 square kilometres of land.

In recent times, President Uhuru Kenyatta has urged international investors to tap into the country’s clean energy sector.