Lake Turkana signs EUR623m finance deal

KENYA: The consortium behind the 310MW Lake Turkana Wind Power Project (LTWP) today signed financing agreements with the lenders to the EUR 623 million project.

The agreements are now subject to certain conditions being met before the project can proceed to financial close, explained LTWP chairman Carlo Van Wageningen. All being well, he hopes to achieve this "in the next few months", with construction to follow.

The mandated lead arranger is the African Development Bank, assisted by the Standard Bank of South Africa and Nedbank Limited. Other lenders include the European Investment Bank, Holland's FMO, Germany's DEB and the East African Development Bank. The Dutch government has also pledged a grant of EUR10 million and the European Union EUR25 million.

UK-based Aldwych International is the lead developer and will also oversee construction and operate the plant. Vestas is supplying 365 of its 850kW V52 turbines, with the first power scheduled to come online early 2016.

LTWP signed a 20-year power purchase agreement with state utility Kenya Power in 2011 at a rate of EUR75.2/kWh*[].

The project, which will be the largest in Sub-Saharan Africa, has experienced numerous obstacles during the eight years of development.

In 2012, it suffered a major blow when the World Bank declined to provide the vital risk guarantees, after which the Kenyan government stepped in.