Consumers are expected to draw the first electricity from the Turkana wind farm in December next year in a new forecast that could significantly cut energy prices for millions of households.
Lake Turkana Wind Power, the sponsor of the project that is Africa’s biggest wind farm, has announced that 20 megawatts of electricity will be tapped in less than 18 months.
Director Carlo Van Wageningen said the project will be completed in two years, adding a total of 310 megawattsto the national grid.
“It has been a long journey but we should be producing 50 MW by September of next year,” said Mr Wageningen. President Uhuru Kenyatta is expected to formally launch the construction of the Sh75billion project tomorrow.
The groundbreaking ceremony in Marsabit County marks a major breakthrough for the mega project, which has been in the pipeline for over a decade. Among the hurdles that the project has had to deal with was low investor confidence in the project, considering its magnitude.
The World Bank, for instance, pulled out its support of the project saying the projected output was too much for the economy to absorb. The Kenyan government, however, stepped in and guaranteed the project against exposure to political risks.
That would mean that the State would be obligated to pay the company for any unforeseen service disruptions presented by political disruptions. World Bank’s fears about excess capacity were informed by the possibility that consumers might pay a higher price per unit to service contractual repayments to the lenders if only a portion was taken up.
But now Wageningen, who was backed by the company Chairman Mugo Kibati, dispelled the fears, saying the risks were non-existent. Wageningen was speaking during a media breakfast meeting in Nairobi yesterday.
Fully mitigated
“All risks have been fully mitigated,” Mr Kibati said. A dozen financiers including the African Development Bank and foreign commercial banks are backing the project with a capital budget of 652 million euros. At that budget, the wind farm is Kenya’s single largest private sector-funded project. A total of 365 wind turbines will be installed over an area covering 40,000 acres in a remote part of Loyangalani District.
Huge blades, measuring 52 metres long, mounted on tall turbines from the Turkana wind farm are expected to collectively provide 20 per cent of the country’s electricity needs. Wageningen said his company had already entered a power purchase agreement with Kenya Power at an estimated price of Sh8.40 per unit – Kilowatt-hour (KwH) or $8.42 cents, at the current exchange rate.
That price would not change for the 20-year period that is the term of the project, while service costs for the company could rise by a maximum of 2 per cent, according to Wageningen. “Wind is free and we are nowhere close to start paying for it,” he said.
Only salaries and maintenance costs could vary over the period, but that is not expected to be much, according to the official.