Wind power project hits snag

The fate of Kenya’s largest green energy project hangs in the balance after a potential financier pulled out of the deal. The Lake Turkana Wind Power project, the largest of its kind in Africa, was estimated to cost Sh46 billion and had the capacity to produce 300 megawatts of power or 17 per cent of the current national supply.

However, shareholders in the company have had to go back to the drawing board as it emerges that the giant private equity player, Globeleq of the United Kingdom, had pulled out of negotiations to buy a controlling stake in the project.

Lake Turkana Wind Power is owned by four local shareholders: businessmen Carlo van Weinegen, John Thiong’o Mwangi, William Dolleman and managing director Chris Staubo.

The foreign shareholders are in a consortium of mainly Dutch investors under a grouping led by KP&P of the Nertherlands, most of whom are manufacturers of wind power generation equipment.

Speculation within the energy sector has linked the ownership of the multi-billion project to politically well-connected players within the government.

But last week, two spokesmen for the company — financial adviser Rizwan Fazzal and one of the shareholders, Mr Dolleman — told the Nation that one of the officials was a consultant who had vast knowledge and understanding of electricity regulatory issues.

National grid

At stake is a massive project that will entail construction of a wind farm consisting of a total of 365 wind turbines, each with a capacity of 850 kilowatts.

The first of its kind in Kenya, the second major component of the project would have involved the building of a 400- kilometre power transmission line from Laisamis in Marsabit District through Maralal, Rumuruti and Longonot, where the wind farm will connect to the national grid.

The cost of the transmission line — to be built on a buy, operate and transfer basis — has been estimated at Sh14 billion. The price Lake Turkana Wind Power will charge to the Kenya Power and Lighting Company (KPLC) will make the project the cheapest source of power in Kenya. Actual generation of power was slated for June 2011.

So far, most of the technical work — including studies on wind patterns, financing plans, environmental impact assessment plans and negotiation of a tariff with KPLC — have been completed.

Globoleq is part of the CDC Group of the United Kingdom, the largest player in the private equity business in the energy sector in emerging markets, with interests in multiple power facilities adding up to 4,000 megawatts in 20 countries.