Construction of Kenya’s delayed Lake Turkana Wind Power Project should begin in the first quarter of next year with a shortfall in funding expected to be filled by the end of the year, a co-developer of one of the largest African undertakings of its kind said on Tuesday.
The wind farm will have a capacity of 300MW of power, helping plug a power supply shortfall which, coupled with an ageing grid, results in regular blackouts that hamper industry in East Africa’s biggest economy. “Q1 (first quarter) next year we should be in construction,” said regional director for Aldwych International, Christian Wright.
“Then it’s about 23 months to the first 50MW of power, then about another seven months or so to get the full 300MW.” The European Investment Bank said it had board approval for €200m to help finance the Lake Turkana project. That means about €120m of the total project cost of a little more than €600m still need approval, Mr Wright said, adding that the target for financial closure was the end of this year. Denmark’s Vestas Wind Systems will supply about 365 wind turbines at the site in the far north of the country.
Kenya Power, the country’s sole power distributor, will pay a tariff of 7.52 euro cents per kilowatt hour, Mr Wright said. The wind farm had been due to start generating power in June 2011 but the project has been dogged by financing difficulties. Kenya on Monday said that it wanted to quadruple its power output by 2017 with the aim of unleashing faster economic growth, eyeing an additional 5,000MW of power supply to the existing 1,664MW generated.
It plans liquefied natural gas (LNG) and coal-fired power stations, while also tapping vast steam reserves to ramp up geothermal production, in order to wean itself off unreliable rain-fed hydro-electric dams. Power costs for industry, which the private sector says leaves it struggling against global rivals, would fall 37% to 9c/ kWh, according to government projections. Domestic tariffs would nearly halve.
But investors at a government briefing said that the timeline was ambitious. Some cautioned such a rapid injection of supply could lead to a mismatch with demand, raising concerns over the ability of Kenya Power to pay for all the added power. “There will also be concern that … if you build so much new capacity up so quickly, will demand actually be able to pick up just as quickly?” said Kurt Simonsen, the head of the European Investment Bank in East Africa and Central Africa.
Lake Turkana is known to be one of the windiest places on Earth.