Following the financial close of Lake Turkana Wind Power Project (LTWP) on 11 December 2014, LTWP has received the first disbursement of funds pursuant to financing agreements signed in March 2014.
“Reaching this important milestone today caps a year of major achievements by LTWP,” said Mugo Kibati, LTWP’s Chairman of the Board. “This includes signing the financing agreements in March, issuing notice to proceed by KETRACO to the transmission line construction contractor in August, financial close of the LTWP equity partners in September, as well as notices to proceed to LTWP’s contractors in October.”
The LTWP project, Kenya Shillings 70 billion (€623 million), is the largest single wind power project to be constructed in Africa and is, to date, the largest private investment in the history of Kenya and arguably one of the most complex and challenging project financing undertaken in the renewable energy space in sub-Saharan Africa. The project is a key deliverable under the Government’s commitment to scaling up electricity generation to 5,000MW and is a flagship project within the Vision 2030 program. The LTWP project will provide cost effective renewable power to the Kenyan consumer and will comprise approximately 20% of Kenya’s currently installed generating capacity.
The LTWP consortium is comprised of KP&P Africa B.V. and Aldwych International as co-developers and investors, and Finnish Fund for Industrial Cooperation Ltd (Finn Fund), Industrial Fund for Developing Countries (IFU), KLP Norfund Investments, Vestas Eastern Africa (VEAL) and Sandpiper as investors. Aldwych Turkana Ltd, an affiliate of Aldwych International, will oversee construction and operations of the project on behalf of LTWP.
The support, interaction and uplifting of local communities is a high priority for LTWP. As such, LTWP adopted a Corporate Social Responsibility (CSR) Program which will be implemented by the Winds of Change Foundation (a wholly owned subsidiary of LTWP). This foundation aims to uplift local communities through programs such as the CHAT HIV awareness campaign, water, sanitation, electrification, sustainable development of agriculture as well as the education of boys and girls.
Initially, activities will be concentrated around the wind farm communities (Loyangalani, Korr and Laisamis divisions, with South Horr). CSR activities will gradually expand to the wider project area.
The financing agreements were signed in March 2014 with the African Development Bank (AfDB), European Investment Bank (EIB), Nederlandse Financierings Maatschappij Voor Ontwikkelingslanden N.V. (FMO), Société De Promotion Et De Participation Pour La Coopération Economique (Proparco), Eastern And Southern African Trade And Development Bank (PTA Bank), Nedbank Capital, The Standard Bank of South Africa, Eksport Kredit Fonden (EKF), Deg – Deutsche Investitions – Und Entwicklungsgesellschaft Mbh, East African Development Bank and Triodos.
After eight years of development with the full support of the Government of Kenya, Kenya Power, the Energy Regulation Committee (ERC) and Kenya Electricity Transmission Company (KETRACO), utilization of the funds signifies the completion of the project’s financing stage, which will allow the project to move towards implementation and to commence producing electricity in 2017.