European support for sub-Saharan Africa’s largest wind power project confirmed
European Investment Bank - BEI/14/68 24/03/2014
24 March 2014
Europe’s long-term lending institution, the European Investment Bank has agreed to provide EUR 200m (Ksh 23 billion) to support the Lake Turkana Wind Power project. The EUR 620 million (Ksh70 billion) scheme will transform supply of renewable energy in East Africa and benefit from additional financial support from the European Union, through the EU-Africa Infrastructure Trust Fund and a broad range of international investors.
As the largest single wind farm in sub-Saharan Africa the Lake Turkana scheme is expected to generate around 20% of Kenya’s power and provide 300MW of reliable, low cost wind power to the Kenya national grid. The project located in remote northern Kenya will be the largest ever private investment in Kenya and include 365 wind turbines, each capable of generating 850 kW, as well as associated power and road connections.
“Availability of affordable energy is essential for Africa and electricity from the Lake Turkana Wind Power project will support economic growth across Kenya by helping to ensure power supply during periods of peak demand. The European Investment Bank congratulates all those involved in the project over recent years and is pleased to have worked alongside a wide range of financial institution as the largest lender to the scheme. Our broad experience of large scale renewable energy projects around the world has highlighted both energy and economic benefits, and demonstrated how innovative schemes such as Lake Turkana can inspire further schemes. Europe’s firm commitment to supporting long-term investment in Kenya is reflected in nearly two-thirds of financial support being provided by European public and private investors and the crucial role of the support of the EU-Africa Infrastructure Trust Fund in closing the deal. Today is a milestone for the history of energy in Kenya and we look forward to the project fulfilling high expectations once complete.” said Pim van Ballekom, European Investment Bank Vice-President.
EU Ambassador, Lodewijk Briet, said: "Today is a historic display of how European private finance, development investment and funding grants can combine to lead the way in building infrastructure in sub-Saharan Africa. The European Union provided the final Euros 25 million to close the package of investment support but it is the size of the support from European companies and the European Investment Bank that have made this project a success.The investment available from the European private sector provides immense opportunities for Kenya and development in the wider region. Like many developing countries, Kenya faces many infrastructure challenges - be it roads, energy or water - and I am delighted to say that the Europe Union is providing large-scale support in all these areas."
Once the Lake Turkana Wind Power project is complete it is expected that Kenya will benefit from fewer power shortages and electricity 60% cheaper than thermal power plants. The scheme will reduce reliance on hydro that can face problems during the dry season and reduce the need to import expensive, unpredictably priced fossil fuels.
The 162km2 site of the new wind farm in Marsabit County has been found to have some of the most consistent winds in Africa. Daily temperature fluctuations and a valley between the Mt. Kulal and Mt. Nyiru ranges that will help ensure more efficient electricity generation by the project.
The European Investment Bank will provide EUR 200 million of senior debt. The European Union through the EU-Africa Infrastructure Trust Fund will take a EUR 25 million preferred equity share in the project to close a financing gap not covered by current or new investors.
Further financial support will also be provided by the African Development Bank, Dutch, French, German, Finnish and Norwegian development finance institutions and commercial banks.
The site of the Lake Turkana Wind Power was selected following an extensive survey focusing on environmental, social and sustainability, technology and commercial considerations, including the remoteness of the area, the strength and stability of the winds, proven technology, benign environmental setting, low population density, security, fresh water availability and road access. To avoid bird contact with the turbines, the site is at least 9 km from the shore of Lake Turkana and a 12 month ornithological study has been concluded and annual environmental audits will be done for the entire wind farm operational period.
The Lake Turkana Wind Power consortium comprises KP&P Africa B.V. and Aldwych International as co-developers, Industrial Fund for Developing Countries (IFU), Wind Power A.S. (Vestas), Finnish Fund for Industrial Cooperation Ltd (Finnfund), and Norwegian Investment Fund for Developing Countries (Norfund). LTWP is solely responsible for the financing, construction and operation of the wind farm. Aldwych, an experienced power company focused on Africa, will oversee the construction and operations of the power plant on behalf of LTWP. Vestas will provide the maintenance of the plant in contract with LTWP. The power produced will be bought at a fixed price by Kenya Power (KPLC) over a 20-year period in accordance with the signed Power Purchase Agreement (PPA).
The European Investment Bank is one of the world’s largest lenders in renewable energy and over the last five years provided more than EUR 26 billion for renewable energy projects around the world.
Over the last five years the European Investment Bank has supported investment in a broad range of projects, covering energy, transport, water and private sector investment totalling 10.5 billion euro across the African continent.
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.
Richard Willis, +352 621 555 758, email@example.com