Kenya wind project closes in on full funding after AfDB loan

NAIROBI (Reuters) - Kenya's Lake Turkana Wind Power project secured a $149.5 million loan from the African Development Bank (AfDB) on Tuesday which officials expect to help speed full funding of one of Africa's largest wind projects.

Kenya aims to plug a power supply shortfall which coupled with an ageing grid means frequent blackouts that hurt industry in east Africa's biggest economy.

Turkana Wind will have a capacity of 300 megawatts on completion in 2015 and produce electricity equivalent to almost 20 percent of the country's installed power.

The AfDB loan includes a partial risk guarantee which is expected to unlock another 300 million euros from other lenders such as the European Investment Bank, officials said.

"We expect to close the financing very shortly," Gabriel Negatu, AfDB's regional director for East Africa, told a news conference.

"We expect some form of groundbreaking by the end of this year," he said.

"To satisfy the bank requirements under project finance is very challenging. Quite rightly so because the banks are taking risks and they want these risks to be mitigated," Carlo Van Wageningen, chairman of Turkana Wind, told Reuters. "(This is) ...proof that financial close is now in sight."

Kenya has enormous wind resources with the site of the Turkana project.

"The winds are very special in that area and among the best, if not the best, in the world. They are very consistent and very predictable," Van Wageningen said.

Some 365 850-kilowatt wind turbines will be installed in the far north county of Marsabit.

Danish firm Vestas has won contracts to supply turbines to KenGen, the country's biggest power producer, which already runs a tiny wind farm near the capital Nairobi.

Kenya, which has been praised by the United Nations Environmental Programme for a progressive energy policy, opened up to independent power producers 15 years ago, ahead of many states in the region.

AfDB said it would fund several other energy sector projects in east Africa, including a hydro-generation plant in Uganda and development of gas fields in Tanzania.

Source: http://news.yahoo.com/kenya-wind-project-closes-full-funding-afdb-loan-124447439.html

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