Kipeto Energy signs 100MW purchase power agreement in Nairobi

Kipeto Energy is one step closer to delivering additional clean energy to the people of Kenya following an announcement that it has formally signed a 20-year Purchase Power Agreement (PPA) with Kenya Power (KPLC) on Thursday. This represents a significant milestone for the development of the 100-megawatt (MW) wind power project. 

In a country where electricity connection has nearly doubled in the last four years to 46%, the Kipeto project will be a key contributor to the Kenyan Government’s initiative to provide 70% of households with electricity by 2017 and universal access by 2020.

The renewable energy project comprises the construction, financing, operation and maintenance of a greenfield wind farm in Kajiado County, south of Nairobi. Once completed, the 100MW, grid-connected wind power facility will be one of the first utility-scale wind projects to come online in Kenya.

The Kipeto project is being developed in partnership with African Infrastructure Investment Managers (AIIM), one of Power Africa’s private sector partners and fund advisor to African Infrastructure Investment Fund 2; Kenyan independent power project developer Craftskills Wind Energy International Ltd; and the International Finance Corporation through its IFC Infraventures business. AIIM, Craftskills and IFC Infraventures will provide equity funding to the project.

The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, is the principal lender at US$233 million. China Machinery Engineering Corporation (CMEC) is the engineering, procurement and construction contractor. General Electric (GE) will supply 60 GE 1.7-103 wind turbines offering increased efficiency at low wind speeds and will service the plant over a 15-year period.

The partnership demonstrates both the public and private sectors’ continuing role in bringing efficient energy generation capacity to Kenya, supporting U.S. President Obama’s Power Africa initiative, which seeks to catalyse the addition of 30,000 megawatts of electricity generation capacity and create 60 million new connections throughout sub-Saharan Africa by 2030.

The 100MW Kipeto wind energy project will be part of the Kenya’s Vision 2030 goal to add more generating capacity to the grid in order to meet the increased power demand in the country. The project is expected to reach financial close and commence construction in the second half of this year.