Works on Lamu coal fired plant faces snag due to an ongoing environmental and social assessment study. The report is set to be presented to National Environment Management Authority (NEMA) in October. This will capture potential effects the plant will have on the environment as well as on livelihoods. The report has also been delayed by an ongoing Resettlement Action Plan for the project, which will sit on 880 acres of land at Manda Bay, Lamu County.
Amu Power Company was formed as a consortium of two companies, Centum Investment and Gulf Energy, the two won a tender to construct the Lamu coal fired plant alongside Chinese multinationals, China Huadian Corporation Power Operation Company, Sichuan Electric Power Design and Consulting Company, and Sichuan No. 3 Power Construction Company. The 981.5-1000MW coal fired plant valued at $2bn will be financed through debt.
Construction of the plant is expected to take 21 months and produce electricity at US 7.52 cents per kilowatt-hour under a 25-year long term Power Purchase Agreement with Kenya Power, which is close to a third the cost for the diesel-fired plants. Energy Regulatory Commission following application in February has also approved this agreement. If all goes as planned, Amu Power plans to kick off construction of the plant on December 2015.
Amu Power has undertaken a number of activities aimed at improving the lives of the residents of Lamu. One of its social activities is to sponsor weekly fresh water delivery using water tanks to locals at no cost. Currently, it is in the process of installing up to twenty tanks in different remote areas including, Kwasasi, Pate, Witu, Mpeketoni, Bargoni, Mokowe, among other areas. It also offers different food donations to poor families living around different stations in Lamu. Amu Power is also in close relationship with Lamu County Government as it has installed street solar lights that light up the sea front of Lamu town. Furthermore, it has donated solar powered study lights to more than 500 students from thirty different schools.
In addition, it has launched an afforestation program with the goal of planting more than 1,000,000 trees that will be planted at different areas around Lamu County to address carbon capture and help reduce the Carbon Footprint from the power plant.
In February, the consortium scooped a $1.2bn financing deal from the Industrial Commercial Bank of China and is negotiating with local banks for additional funds. The African Development Bank (AfDB) will provide a partial risk guarantee for the coal plant, the largest in East and Central Africa. This project intends to address the challenges of power shortages and cost of electricity supply in Kenya.
Power Construction Corporation of China, the project contractor Amu brought on board early in June a $ 1billion deal, will have three months of preparatory work before moving to the site. The plant that will rely on coal imports from South Africa at the rate of $50 a tonne until coal production from Mui Basin in Kitui county starts, will produce electricity in three generating units of 350MW each after completion.