Lake Turkana Wind Power secures €623 Million
LIKE Turkana Wind Power Project (LTWP) has today marked a significant milestone with the loan signing of €623 million (Ksh 76 billion), making it the largest private investment in Kenya’s history.
Potentially Africa’s largest single wind power project to be constructed, has attracted financial support from European Investment Bank (EIB), the Standard Bank of South Africa, Nedbank, FMO, Proparco, East African Development Bank (EADB), PTA Bank, EKF, Triodos and DEG; all who were led by the African Development Bank (AfDB).
“The LTWP project has been under private development since 2005 and that is in itself a remarkable testimony to the stability and soundness of the Kenyan electricity sector as well as the environment for Independent Power Producers” said Carlo Van Wageningen, Chairman,LTWP. “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 all the other partners who have since come on board.”
The signing of the financing agreements signifies the completion of the project’s financing subject to completing the remaining conditions precedent after which construction will commence this year and begin producing power in early 2016, adding 300MW to the national power grid.
LTWP is a key deliverable under the Government’s commitment to scaling up electricity generation to 5,000MW and to provide cost effective renewable power to the Kenyan consumer. The project alone will produce approximately 20% of Kenya’s currently installed capacity at €7.52 cents/kWh (Ksh9/kWh).It is also a Vision 2030 flagship project and will be a transformative project in terms for the development impact to the Northern arid areas of Kenya, the electricity sector, and to Kenya as a whole. It is also expect to generate up to US$150 million/year in foreign currency savings to Kenya through fuel displacement costs.
The project’s debt raising is led by the AfDB, as mandated lead arranger, the Standard Bank of South Africa and Nedbank Limited as co-arrangers, EIB, FMO, Proparco, East African Development Bank, PTA Bank, EKF,Triodos and DEG. The Government of the Netherlands has also provided a grant of €10 million and the European Union, a subsidized facility through the EU Africa Infrastructure Trust Funda further €25 million.
In a ceremony commemorating this major milestone, Africa Development Bank Regional Director for the Eastern Africa Resource Centre, Mr. Gabriel Negatu stated, “This is Kenya’s largest private sector investment since independence. As the lead arrangers, we are proud to have played the key role of convening all the partners together to reach this historic financial close. Africa Development Bank has further provided a Partial Risk Guarantee to GoK to protect the project against the risk of delays in the construction of the transmission line, thereby providing additional comfort to prospective lenders.”
The LTWP consortium is comprised of KP&P Africa B.V. and Aldwych International as co-developers and investors, and Finnish Fund for Industrial Cooperation Ltd (Finnfund), Industrial Fund for Developing Countries (IFU), Wind Power A.S. (Vestas), Norwegian Investment Fund for Developing Countries (Norfund), and Sandpiper as investors. Aldwych will also oversee construction and operations of the project on behalf of LTWP.