Spain give Kenya wind project $150m

Kenya Wind Power Ambitions

The Spanish government has given Kenya's renewable energy ambitions a huge boost by investing US$150 million (110 million euros) into the country's 300MW Turkana Wind Power project, the largest wind power development in Africa.

The money will be used to finance the construction of the 427km double circuit transmission line between Loiyangalani in Marsabit, northern Kenya, and the nearest point to the national grid at Suswa, approximately 100 km from Nairobi, just as concerns were beginning to circle over whether the massive project would actually achieve financial closure.

When completed the project will represent one fifth of Kenya's existing capacity for generating electricity.

The specific details of the offer by the Spanish government are as follows: First, a concessional loan of 55 million euros at an interest of 0.10 percent, with a repayment period of 35 years, including a 14-year grace period.

Kenya's huge wind energy potential

This loan will be supported by a Financial Co-operation Agreement between Kenya's Ministry of Finance and Spain's Ministry of Industry, Tourism and Trade.

Second, a 55 million euros commercial credit with official support from the Spanish Export Credit Insurance Company will be extended on OECD terms.

Third, there will be a sovereign guarantee by the Kenyan government.

Kenya's wind energy potential has been a point of interest for foreign green investors for some time, and the nation now lies fifth in the world and first in Africa in terms of wind power generation. A wind atlas has been developed to give the information about the wind potential in various regions of Kenya.

The Lake Turkana Wind Power Project is so massive that implementation will almost be a logistical nightmare - involving construction of 365 giant wind turbines at a cost of US$800 billion and transporting to Marsabit - almost 1500 km from the port of Mombasa.

Improving energy security

The wind farm, to be constructed on a 66,000 hectares of land, is to be funded by equity and long term loans, mainly by long term foreign financiers led by KP&P of the Netherlands and supplier credits from Dutch manufacturers of wind power generation equipment.

Kenya are looking to drastically improve its energy security, and the current generation mix is made of 719MW hydro, 163MW geothermal, and 407MW thermal power - including 290MW from emergency power producers.

That output stands against real demand level of 1135 MW and peak demand of 1107 such units, leaving the reserve at just four per cent.

Related Articles:

Eyes open to Kenyan wind potential | Kenya's switch to biofuels delayed | Kenya's open-ended green energy fund

Daniel Jones

Daniel is a Politics and Philosophy graduate from Cardiff University where he also worked as a section editor on the award winning student newspaper. After university he joined an IT support company where he was a B2B online writer. He loves anything to do with sport and joined GDS in July 2009.

Like this article? Get the RSS feed: