The north eastern region of Kenya has commenced with construction of Africa’s largest wind farm that will contribute an additional 20% of power to the country’s national grid. The Lake Turkana Wind Power project (LTWP) started the construction in November of a 310MW wind farm in Loiyangalani, Marsabit which will be constructed over 32 months and consists of 365 wind turbines.
‘Standard Bank, Nedbank and the AfDB are the Mandated Lead Arrangers for the Project. Standard Bank and Nedbank both provided the commercial bank guarantees for the EIB Commercial Bank Guarantee Facility. The two commercial banks will also be providing the interest rate hedge for the project, which reached financial close on 11 December 2014’, a press release announced.
Kwame Parker, Standard Bank’s East Africa Head of Power and Infrastructure was encouraged by the private sector opportunities available in the energy sector.
‘This transaction is a good example of how to successfully bring private players into the renewable energy sector and serves as a good vote of investor confidence in the Kenyan economy’, Parker said.
‘The project is designed to provide a clean source of electricity to Kenya. It will not only contribute to the social and economic development of Kenya, but will also contribute towards Kenya’s goal of significantly increasing its installed capacity and reducing its reliance on more expensive sources of power’.
The Kenya Electricity Transmission Company (Ketraco) will install the necessary 428Km of overhead transmission line which will feed power into the grid. Lake Turkana Wind Power and the Kenya Power and Lighting Company have signed a 20-year power purchase agreement (PPA).
George Kotsovos, Executive, Power and Infrastructure Finance at Standard Bank said that this project is where it is today due to the combination of hard work and co-operation from all parties involved.
‘The innovative and unique structure of this transaction is the culmination of four years of hard work together with our arranging partners with the aim of bringing the right funding solution to the participants in this deal’, Kotsovos said.
‘Power generation is a very relevant sector in East Africa at the moment, especially when one considers the energy shortfall and the important role that it plays in boosting economic growth. Standard Bank is proud to have been able to offer its expertise to contribute towards boosting the generating capacity of a fast-growing economy like Kenya, which remains the economic power house of the region’, he concluded.