Industrial & Commercial Bank of China (ICBC) and Standard Bank of South Africa have concluded a deal to finance a $2-billion, 1 000 MW Amu coal-fired power plant, in Kenya.
ICBC, which has committed $1.2-billion to the project, has a 20% stake in Standard Bank, which will make available $300-million for the project.
The coal plant is being constructed by a consortium of local and international firms under investment vehicle Amu Power Company, which will provide the balance of $500-million.
The partners in the consortium are Kenyan firms Gulf Energy and Centum Investments and Sichuan Electric Power Design & Consulting Company and Sichuan No 3 Power Construction Company – both subsidiaries of Chinese energy giant PowerChina – as well as China Huadian Corporation Power Operation Company.
The securing of the $300-million from Standard Bank paves the way for the construction of the plant, which is critical to Kenya’s ambitions to increase electricity generation by 5 000 MW over the next two years.
Gulf Energy CEO Francis Njogu says construction will start as soon as the Kenya government completes the acquisition of 860 ha of land in the Lamu coastal area, where the plant will be located.
“We hope to start construction as soon as the land is secured and we project it will take about 21 months to complete the project,” he says.
Kenya’s National Land Commission has already started the process to acquire land.
Construction of the plant has been hampered by not only by delays in securing funding but also controversies over the awarding of the contract to Amu, local communities refusing to be relocated and environmentalists raising concerns over carbon emissions and toxic coal ash.
The project has also been affected by the failure of the State’s environment watchdog, the National Environmental Management Authority, to grant the necessary approvals on time.
Once the plant is up and running, it will be the single largest power generating plant in East, Central and Southern Africa, excluding South Africa, and will account for about 50% of Kenya’s power production.
Amu Power has already signed a power purchase agreement with Kenya Power to sell electricity generated at the plant at a cost of US7.52c/kWh.