Lamu coal power plant faces fresh hurdle

Kwasasi Farmers Association demonstrate in Lamu Island on Wednesday on July 4, 2018, in support of the Amu Coal project in which they have demanded the National Land Commission speed up land compensation. [File, Standard]

Kenya’s proposed coal-fired power plant has suffered another setback that puts the future of the Sh200 billion energy plant in Lamu at risk.

The latest development follows a revelation by the African Development Bank, (AfDB) President Akinwumi Adesina that the bank plans to switch its funding from coal power stations in Africa to renewable energy.

“Coal is in the past, and renewable energy is the future,” said Adesina.

“For us at the African Development Bank, we’re getting out of coal.”

He was speaking at the United Nations General Assembly on Climate Change on Monday.

Adesina outlined at the global meeting efforts by the lender to build the “largest solar zone in the world” in the arid Sahel belt.

The bank unveiled a Sh50 billion green base-load scheme that will be rolled out beginning next year, that is set to yield Sh500 billion of investment to help African countries transition from coal and fossil fuel to renewable energy.

AfDB was one of the financing partners Amu Power was courting to fund the power plant. It was courting to fund construction of the 1,020 MW coal-fired plant at the coastal town in the early days of the project, but the latest move could now force the project to seek alternative financing.

Earlier this year, suspended Treasury Cabinet Secretary Henry Rotich said he had met AfDB officials on the sidelines of the lender’s annual meeting in Busan, South Korea, to give them an update on the project ahead of the bank’s board meeting.

“I gave them an update on the entry of General Electric (GE) into the deal as well as the environmental impact assessment report. You know that they are giving us a partial risk guarantee and we are hoping that when it goes to the board it will be approved,” he said.

When contacted for comment, Amu Power advised The Standard to reach out to them on a later date. In its Environmental and Social Impact Assessment report for the plant, Amu Power had argued that the Lamu coal-fired plant adhered to AfDB’s energy policy.

“The proposed coal power plant is part of Kenya’s diverse energy mix and is expected to provide the cost-effective power,” stated the report in part.

Amu also argued that the power plant will incorporate clean coal technologies whose efficacy is higher than conventional coal plants and that the consortium was in the process of planting 300,000 trees.

Last year, General Electric committed Sh50 billion investment towards the project that will see GE Power, the firm’s energy subsidiary, supply the Sh200 billion power plant with generation equipment in exchange for a stake in the Chinese-built power plant.