AfDB funds Turkana power project
03 October 2013, 17:06
Nairobi - The Board of the African Development Bank (AfDB) announced the approval of the Lake Turkana Transmission Line Delay Partial Risk Guarantee for €20 million.
The project, which is the first of the African Development Fund’s Partial Risk Guarantees (ADF PRG), will support the Lake Turkana Wind Power Project.
The objective of the project is to provide clean, reliable, low-cost power and to strengthen Kenya’s national grid by increasing national installed power by approximately 17 percent.
The transmission line will also include a fibre-optic cable that will carry communications data. Over the long term, the project will help decrease the cost of energy to end-users, increase access to energy in rural areas, increase the national electrification rate, reduce carbon dioxide emissions and decrease fossil fuel dependence.
Under the wind project, the Lake Turkana Transmission Line Delay PRG will be used to alleviate the risk for the construction of a 428-kilometre publicly owned transmission line between Loyangalani and Suswa and associated substations needed to connect the project to the national grid.
The PRG will support the Government’s on-time delivery of the transmission line and will reduce the risk of it being unable to meet payment obligations. More specifically, the ADF PRG will provide partial risk mitigation to Lake Turkana Wind Power Limited and the providers of debt financing to the project for risks associated with construction delays.
The Lake Turkana project is Africa’s biggest wind power project.
It involves the development of a 300 MW wind farm comprising 365 wind turbines of 850kW capacity each and a 33kV electrical network. The average electricity production of the project is estimated at 1,440 GWh per year, equivalent to the annual generation capacity of Namibia in 2010, and will be sold to the grid at a price of .0752 €/Kwh.
Kurt Lonsway, Acting Director of the AfDB’s Energy, Environment and Climate Change Department, said, “This ADF PRG will promote foreign direct investment in Kenya and crowd in private financing for power generation. Also, by reducing the risk profile for the sponsors of and lenders to the Lake Turkana project, the PRG will accelerate financial closure and reduce the overall cost of capital to the project.”
– CAJ News