Financing agreements worth over US$870 million have been signed for the 300 MW Lake Turkana Wind Power project, planned for northern Kenya.
Lake Turkana will be the largest single wind power project to be constructed in Africa, and will comprise 365 wind turbines each rated at 850 kW and a 33 kV electrical network.
On 24 March, project developer Lake Turkana Wind Power Project signed financing agreements with a syndicate of banks including the African Development Bank (AfDB), European Investment Bank (EIB), the Standard Bank of South Africa, Nedbank, FMO, Proparco, East African Development Bank, PTA Bank, EKF, Triodos and DEG.
The signing of the loan agreement means that the project, which has been under private development since 2005, can begin construction, subject to completing remaining formal conditions.
"We are delighted that this project will move forward with the continued support of the government of Kenya, Kenya Power, KETRACO the African Development Bank, and the numerous other partners," said Carlo Van Wageningen, chairman, LTWP, a consortium comprising KP&P Africa B.V. and Aldwych International as co-developers and investors, among others.
The Lake Turkana project will be financed with a mixture of equity, mezzanine debt and senior debt. The government of The Netherlands has provided a grant of €10 million and the European Union a subsidised facility through the EU Africa Infrastructure Trust Fund worth a further €25 million.
Other investors and lenders include Vestas, Finnfund, the Industrial Fund for Developing Countries (IFU), Nordfund and a strong local sponsor KP&P on the equity side. In addition, the Overseas Private Investment Corporation (OPIC) is also in advanced discussions with LTWP to join the lender group.
The Lake Turkana project site is situated on the southeast border of Lake Turkana between two high ranging mountains in the Turkana Corridor where a low-level jet stream originating in the Indian Ocean creates favourable wind conditions.
LTWP has signed a 20-year Power Purchase Agreement with the government of Kenya through its electricity entity, Kenya Power. The project is expected to produce approximately 20% of Kenya’s current output at €7.52 cents/kWh.
The LTWP will essentially assist diversification of Kenya’s energy mix and reduce the country’s reliance on power production from oil and diesel power generators, says Tshepo Mahloele, CEO of Harith General Partners.
The project is expected to begin producing power in early 2016. Co-investor and developer Aldwych International will oversee the construction and operation of the project.
Photo: Lake Turkana Wind Power Project (LTWP) signed a loan agreement with the African development Bank on Monday 24 March 2014 (Source: LTWP)
