After years of negotiation, one of the largest wind power projects in Africa has been approved in an $870 million financing agreement in Nairobi.
The Lake Turkana Wind Power Project, in northern Kenya, will provide 300 megawatts of reliable, low-cost energy to the country’s national grid.
“The project will benefit Kenya and specifically the Turkana area, where unemployment is high, with jobs, economic development and, most importantly, electricity which is a vital element in any economy,” reads a press release issued Monday.
There are three registered national parks in the Lake Turkana area, in the Kenyan Rift Valley.
According to Unesco, the area serves as “a stopover for migrant waterfowl and are major breeding grounds for the Nile crocodile, hippopotamus and a variety of venomous snakes.”
It also happens to be very windy in the right places. The project site is located in an area between two high mountains. A low-level jet stream from the Indian Ocean passes between them to create a constant source of stable, high-speed wind.
When it is complete, the new venture should save the Kenyan government millions of dollars on fuel imports. Currently, more than 52 percent of Kenyan electricity comes from hydroelectic plants.
“It is our assertion that the Lake Turkana Wind Project will greatly reduce Kenya’s overreliance on hydropower, which is playing a crucial role in ensuring security of electricity supply but is however vulnerable to periodic draught seasons,” said Tshepo Mahloele, CEO of Harith General Partners Ltd., a South Africa-based fund manager for infrastructure development all over the continent.
The project will be financed through a mixture of equity, mezzanine debt and senior debt. It’s been in the works since 2010, when LTWP signed a 20-year power purchase contract with Kenya Power and Lighting Company, of which the Kenyan government is a majority stakeholder. LTWP is a joint development that includes KP&P BV Africa, power project developer Aldwych International Limited, Vestas Wind Systems and development funds from Norway, Denmark and Finland.