International investors have arranged a €625-million finance package for the Lake Turkana Wind Power (LTWP) project, for which the construction of a 300 MW wind farm, in north-eastern Kenya, is taking place.
The 12 investors include banking institutions Standard Bank, Nedbank and the African Development Bank, which are also the lead arrangers for the project. Financial close for the project took place in December.
The wind farm will consist of 365 wind systems, manufactured by global energy company Vestas, which will be erected in Loiyangalani, in Marsabit County, which is located 10 km east of Lake Turkana.
Construction will take about three years before the full installation of 300 MW; however, phased completion will ensure that power will be fed into the grid within two years.
The wind farm is expected to supply electricity to the Kenyan national grid equivalent to about 20% of the current installed generating capacity.
Standard Bank East Africa head of power and infrastructure Kwame Parker tells Engineering News that Kenya’s average cost for electricity is about $0.17/kWh; the LTWP project will ensure a cost of about $0.10/kWh, which is a benefit for consumers and businesses.
“As the largest wind project in sub-Saharan Africa, with a myriad of international investors, it showcases Kenya as a solid investment destination. Owing to the location of the project, which has suffered chronically from underinvestment, the associated infrastructure, such as roads and power lines, will generally help to create economic activity in this region,” he says.
As part of the project, the LTWP will rehabilitate 204 km of an existing road leading to the wind farm site, while State-owned Kenya Electricity Transmission Company will construct the required 428 km overhead transmission line and a substation in the town of Suswa, 90 km north of Nairobi.
The renewable power generated by the project will be fed into Kenya’s national grid as part of a 20-year power purchase agreement between the LTWP and national electricity utility Kenya Power & Lighting Company.
“Standard Bank has positioned itself as a leader in power project financing on the continent and has a dedicated on-the-ground team in Kenya to focus on these types of opportunities. Standard Bank is acting as arranger, adviser, and/or lender on at least 70% of the Kenyan projects in late-stage development or operation. It is natural that a project of this profile would be appealing to us,” Parker says.