Belgium’s firm inks financial deal on Kenya’s wind farm

Belgium firm Electrawinds has signed cooperation agreement with International Finance Corporation (IFC) to jointly develop a large-scale wind project in coastal Kenya in early 2014.

Electrawinds and IFC InfraVentures, a 100 million U.S. dollars five-year fund created by IFC to fund private infrastructure projects, said the planned 235 million dollars wind farm is to have an installed capacity of 90 MW.

“Electrawinds and IFC will share the project development efforts and the proven track record of IFC is expected to contribute in securing the necessary project finance,” the Belgian company said in a statement received in Nairobi on Wednesday.

The Luxembourg-based company has developed the Mpeketoni wind farm, which is located about 20 km from the site of the proposed Lamu port, since 2011 and considers IFC InfraVentures to be a key partner to further develop, finance and, eventually, operate the future wind farm.

“Now that a joint commitment has been made, a joint development team has been set up to further develop the project. After having obtained the environmental permit, it is expected that the planning permission will also be obtained — later this year,” the statement said.

The East African nation expects to add 131 megawatts (MW) of wind generated electricity to its national grid by end of 2014 based on the progress made by approved wind power projects.

Principal Secretary in the Ministry of Energy Patrick Nyoike said a 60MW wind power project by Aeolus Kenya is expected to break ground any time from now following the 150-million-dollar financial closure in March.

“The progress is good and several wind power companies have already signed power purchase agreements with the Kenya Power Company,” Nyoike told Xinhua an interview in Nairobi last month.

Progress of wind power generation in Kenya has been slow, attributed partly to the long time it takes to collect wind data and the huge investment outlay needed to finance the projects.

Power generator, KenGen that is majority owned by the Kenya government, is also expected to add 21 MW of wind generated electricity to its current generation of 5.1, located at Ngong Hills, 29 km northeast of the capital.

The East African nation has been facing unreliable supply of electricity highlighted by frequent power blackouts mainly blamed on higher demand than current installed capacity.

Even more worrying is that the electricity tariff is second highest in East Africa and analysts say harnessing power from geothermal is a capital intensive and high risk venture, which has scared away most, would be explorers.

Electrawinds and IFC InfraVentures said they are firming up their common ambition to provide Kenya with a major incentive for renewable energy following the signing of the cooperation deal.

“Depending on which turbines will be selected, the wind farm in Mpeketoni will consist of between 36 and 45 turbines. The project site spans an area of 800 hectares and is located some 20 km from the new seaport of Lamu which — thanks to current expansion — is gaining in economic importance,” the statement said.

It is expected that the economic growth in the area will be accompanied by an increase in local electricity consumption. The Mpeketoni wind farm can help satisfy this need for additional capacity.

Kenya’s current electricity demand is 1,191 MW while the effective installed capacity under normal hydrology is 1,429 MW.

Hydro sources contribute 52.1 percent of total electricity, thermal 32.5 percent, geothermal 13.2 percent, baggase 1.8 percent and wind 0.4 percent.