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Lake Turkana Wind Project to start in 2015

FINANCIAL STANDARD
By Jackson Okoth | Nov 25th 2014 | 3 min read
By Jackson Okoth | November 25th 2014
FINANCIAL STANDARD
A view of Lake Turkana from Loiyangalani, where 40,000 acres has been set aside for LTWP Project. [PHOTO: BONIFACE THUKU/standard]

After more than eight years of delay, contractors are expected to move to the 300 megawatt Lake Turkana Wind Project (LTWP) site next year.

However, construction of the power station is expected to start after all the necessary road and railway networks needed to move turbines and other heavy equipment are put in place.

“The wind project is underway, with final notice to proceed given to most of our major contractors — Worley Parsons, Vestas, Siemens, Civicon and SECO — in late October 2014,” said Herb Gammons, the director of the project.

Renewable energy

He said the initial activity will primarily be related to creation of infrastructure, including roads and accommodation.

“Actual movement of turbines will not commence until next year, with first electricity production in 2017.”

The financing agreement for the 300MW LTWP was signed in March this year, clearing the way for construction of Africa’s largest wind power project.

The semi-arid Turkana County is better known for drought, hunger and poverty, but it also has an unusual climatic phenomenon — Lake Turkana, which has one of the best wind resources in the world.

“This project, estimated to cost 623 million euros or Sh75 billion, is considered the largest single private investment in the history of Kenya and is expected to contribute significantly to the country’s power needs,” said Carlo van Wageningen, LTWP’s chairman.

“It will provide affordable and renewable energy for local communities and all Kenyans, and change lives by providing jobs and decent incomes in the Turkana region.”

For construction work to begin on the wind project, a road network must be constructed to enable contractors transport earth-moving equipment to the site. The machines weigh an average 12,000 tonnes.

“We are still grappling with this logistical nightmare owing to the fact that a 206 kilometre road that was to be constructed to ease transportation is yet to take off,” said Mr Wageningen.

The wind power produced is expected to be equivalent to about 20 per cent of the current installed electricity generating capacity. The station will comprise 365 wind turbines (each with a capacity of 850 kW).

The wind farm site, covering 40,000 acres, is located in Loiyangalani district, Marsabit County, approximately 50km north of South Horr township.

IMPROVED access

Figures from the Energy ministry indicate that only three out of 10 Kenyans have access to electricity.

“This ratio will increase to eight for every 10 Kenyans when the project comes onstream. This development will, therefore, stimulate numerous economic activities,” said Energy Principal Secretary Joseph Njoroge.

The Kenya Electricity Transmission Company Ltd (Ketraco), with concessional funding from the Spanish government, will construct a 428km transmission line to deliver the LTWP electricity, along with power from future plants, to the national grid.

The developers of the project are a consortium comprising KP&P Africa BV and Aldwych International as co-developers, Industrial Fund for Developing Countries (IFU), Wind Power AS (Vestas), Finnish Fund for Industrial Cooperation Ltd (Finn Fund), and Norwegian Investment Fund for Developing Countries (Norfund).

LTWP is solely responsible for the financing, construction and operation of the wind farm.

Aldwych, a power company focused on Africa, will oversee the construction and operations of the plant on behalf of LTWP.

Vestas will provide maintenance for the plant.

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

The lead arranger of the debt financing is the African Development Bank, with Standard Bank and Nedbank Capital, both of South Africa, as co-arrangers.

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