ERC, investor in dispute over power project

A dispute between the Energy Regulatory Commission (ERC) and an investor has delayed the construction of the Sh21 billion wind power project in Lamu County.

The ERC and the investor have disagreed on how the project will be implemented.

The project is sponsored by the Baharini Wind Power Project, a consortium of Elicio, a Belgium company working with a Kenyan firm — Kenwind Holdings Limited.

So far, 3,206 acres of land have been acquired at Baharini, in Mpeketoni, where the project is expected to be established to generate 90 megawatts of electricity upon completion.

PURCHASE AGREEMENT
Despite the project getting support from land owners and approval by the Ministry of Energy and other relevant bodies, it is yet to kick off.

According to the Baharini Wind Power Project Director Susan Nandwa, discussions are ongoing with the ERC in order to have a one Power Purchase Agreement (PPA), which will enable the investor to generate the 90MW of electricity as was earlier agreed.

A document seen by the Nation reveals that ERC is proposing to divide the PPA into two, where 50MW of electricity and another 40MW will be generated at the project site.

However, Ms Nandwa said the move will be too expensive for the investor.

“We want to have the 90MW of electricity established in one PPA as was earlier negotiated and agreed.

"We can’t have a 50MW and 40MW of power as proposed by ERC.

"Once we accept the two PPAs, the cost of grid connection will be too high for us since we will be required to have two transformers. The cost will be prohibitive; it is tantamount to killing the entire project,” she said.

COMPENSATION
Meanwhile, farmers whose land have been acquired for the establishment of the project at Baharini have expressed disappointment over delayed compensation.

The more than 600 land owners said they have been waiting for compensation for the past three years.

But Ms Nandwa attributed the delay to the ongoing discussions with ERC.

“The National Land Commission has already approved the project and even identified the land owners to be compensated.

"However, we cannot proceed with the compensation since we haven’t been given the Commercial Operations Date that can enable us to know when we are supposed to start the project,” Ms Nandwa said.

She said the residents will be compensated once the investor is given the COD.