OPIC guarantees investment for Kenya wind project
The Board of Directors of the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, has approved an investment guaranty of up to US$250 million to support construction of the Lake Turkana Wind Power project in northern Kenya.
OPIC aims to catalyze private investors to produce 10,000MW of new energy for the more than 600 million Sub-Saharan Africans. OPIC has committed to provide US$1.5 billion to develop energy projects throughout Sub-Saharan Africa over the next five years in support of the initiative.
The project cost is estimated at €623 million of which senior debt accounts for 70%, subordinated debt another 10% and equity the remaining 20%. The lenders supporting the project include: African Development Bank (AfDB), European Investment Bank (EIB), Standard Bank of South Africa, Nedbank, FMO, Proparco, East African Development Bank, PTA Bank, EKF, Triodos, DEG.
The Government of the Netherlands is also supporting the project with a grant of €10 million and the European Union is providing a subsidized facility of €25 million through the EU Africa Infrastructure Trust Fund.
The project, which will be the largest in Sub-Saharan Africa, has experienced numerous obstacles during the eight years of development. In 2012, it suffered a major blow when the World Bank declined to provide the vital risk guarantees, after which the Kenyan government stepped in.
UK-based Aldwych International is the lead developer and will also oversee construction and operate the plant. Vestas is supplying 365 of its 850kW V52 turbines, with the first power scheduled to come online early 2016. The power produced will be bought at a fixed price by Kenya Power (KPLC) over a 20-year period in accordance with a Power Purchase Agreement (PPA).
The wind farm site covers 40,000 acres (162 square km) of land located in Loyangalani District, Marsabit West County, in north-eastern Kenya, approximately 50km north of South Horr Township. The Project also includes upgrading of the existing road from Laisamis to the wind farm site, a distance of approximately 204 km, as well as an access road network in and around the site for construction, operations and maintenance. The Kenya Electricity Transmission Company Ltd (Ketraco), with concessional funding from the Spanish Government, is constructing a double circuit 400 kv, 428 km transmission line to deliver the LTWP electricity along with power from other future plants to the national grid.
