Kenya wind power project to start by December

Written By:Reuters,    Posted: Sat, Mar 26, 2011

The government will earn about 2 billion Kenyan shillings in carbon credit earnings

Investors behind Kenya's 300 megawatt Lake Turkana wind power project said on Saturday construction will start by December after the government issued them with a letter of support for the private venture.

The 617 million euro Lake Turkana Wind Power (LTWP) project had been scheduled to inject an initial 50 MW into the national grid by June and to be at full capacity a year later.

Last week, LTWP had said the project start had been delayed to end-2013 due to lack of letters of credit.

LTWP is a subsidiary of KP&P, a firm from the Netherlands that sets up wind power projects.

"We now look up to breaking ground by December and have the initial 50 megawatt running on the national grid by September 2013 and at full capacity by mid 2014," LTWP Chairman Carlo Van Wageningen told Reuters at an event to sign the letter of support with the government.

"With the letter of support we now expect to be able to close financial loan deals soonest possible and get going with the work."

"Regrettably we had delays on the way but the new commitment by the Kenyan government resolves several issues that had been raised by some of our targeted financiers," Van Wageningen said.

LTWP would inject about 180 million euros into the project as equity, representing a 30 percent stake, he added. "The letter of support from the government of Kenya will heavily boost our applications to our financiers. We are now keen of speedily working towards implementing this unique project," he said.

The project involves building a wind farm within Loiyangalani, a remote region in the northwest near the Lake Turkana basin. The venture will consist of 365 wind turbines, each with a capacity of 850 kilowatts and is the first of its kind in Kenya.

LTWP already has an agreement with Denmark's Vestas Wind Systems to supply 360 turbines.

LTWP will generate the 300 MW transmit it to the national grid through a 428 km (266 mile) overhead line it will build for the government, and offload the electricity to the state-run Kenya Power and Lighting Company.

"By issuance of the letter of support to LTWP we are certain that it will help unlock investment potential of other IPPs(Independent Power Producers)," Patrick Nyoike, the permanent secretary at the Energy ministry said.

The government will also get revenue from carbon credits from the project.

The government will earn about 2 billion Kenyan shillings in carbon credit earnings, Joseph Kinyua, the permanent secretary at the Finance ministry told Reuters.

"These proceeds will be ploughed back towards the improvement of the lives of households in the Turkana region," he added.