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Lake Turkana Wind project receives first disbursement of funds

BUSINESS
By Standard Reporter | Dec 20th 2014 | 2 min read
By Standard Reporter | December 20th 2014
BUSINESS

Following the financial close of Lake Turkana Wind Power (LTWP) on December 11, the project has received the first disbursement of funds pursuant to financing agreements signed in March.

“Reaching this important milestone today caps a year of major achievements by LTWP,” said Mugo Kibati, LTWP’s Chairman of the Board. “This includes signing the financing agreements in March, issuing notice to proceed by KETRACO to the transmission line construction contractor in August, financial close of the LTWP equity partners in September, as well as notices to proceed to LTWP’s contractors in October.”

The LTWP project, which is estimated to cost Sh70 billion, is the largest single wind power project to be constructed in Africa and is, to date, the largest private investment in the history of Kenya. The project is a key deliverable under the Government’s commitment to scaling up electricity generation to 5,000MW and is a flagship project within the Vision 2030 programme. The LTWP project will provide cost effective renewable power to the Kenyan consumer and will comprise approximately 20 per cent of Kenya’s currently installed generating capacity.

The LTWP consortium is comprised of KP&P Africa B V and Aldwych International as co-developers and investors, and Finnish Fund for Industrial Cooperation Ltd (Finn Fund), Industrial Fund for Developing Countries (IFU), Norwegian Investment Fund for Developing Countries (Norfund), Vestas Eastern Africa (VEAL) and Sandpiper as investors. Aldwych Turkana Ltd, an affiliate of Aldwych International, will oversee construction and operations of the project on behalf of LTWP.

Best wind resources

The support, interaction and uplifting of local communities is a high priority for LTWP. The financing agreement was signed in March, clearing the way for construction of Africa’s largest wind power project.

Turkana, which covers a semi-arid part of Kenya is known for drought, hunger and poverty. It also has an unusual climatic phenomenon — Lake Turkana has one of the best wind resources in the world.

After more than eight years of delay, contractors will from next year move to the site of the 300 MW Turkana Wind Power Project. But this will only happen after all the necessary road and railway networks needed to move turbines and other heavy equipment, are put in place.

The power produced will be bought at a fixed price by Kenya Power (KP) over a 20-year period in accordance with the signed Power Purchase Agreement (PPA).

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