Kenya: Gets Green Alternative

Sh50 billion wind power project gets green light

The government has signed an agreement with Lake Turkana Wind for the generation of 300 megawatts of green power. Photo/FILE

March 27 2011 - The government has signed a deal with Lake Turkana Wind Power Ltd for a Sh50 billion wind power project.

This ends months of anxiety over the largest such project on the African continent.

This follows Treasury permanent secretary Joseph Kinyua and the company’s chairman Carlo Van Wageningen signing an agreement on the 300 megawatts initiative.

Mr Kinyua said the deal is a culmination of a long process that has taken over a year in an effort to safeguard the taxpayers’ interests.

“There has been erroneous impression given in some sections of the media that the government was not willing to support investors in the energy sector,” he said at Treasury building on Saturday.

The agreement, otherwise known as a Letter of Support, provides two components.

The first is an assurance to the firm’s lenders that the government will step in and help in case Kenya Power and Lighting Company is unable to buy the power generated.

The other is that Independent Power Producers (IPPs) will obtain liquidity support through the International Development Association Partial Risk Guarantees while the termination and political risks will be covered by Multilateral Insurance Agency.

Mr Kinyua said since the letter is not an explicit guarantee, the country’s public debt statistics are not adversely impacted upon. {continued}