LTWP Signs Financing Documents with AfDB and Other Lenders

KPLC CEO Ben Chumo (Left) – LTWP chairman Carlo van Wageningen (second left) – Principle Secretary Ministry of Energy Eng. Joseph Njoroge (second right) – Africa Development Bank Regional Director, Gabriel Negatu (right), during the signing of a loan agreement between Lake Turkana Wind Power and African development Bank on Monday 24 March 2014

Monday 24 March 2014, Nairobi, Kenya. Today, Lake Turkana Wind Power Project (LTWP) signed the financing documents with African Development Bank (AfDB), European Investment Bank (EIB), the Standard Bank of South Africa, Nedbank, FMO, Proparco, East African Development Bank, PTA Bank, EKF, Triodos and DEG, in order for the 623 million (Ksh 76 billion), 300MW wind project to proceed. The Overseas Private Investment Corporation (OPIC) is in advanced discussions with LTWP to join the lender group.

After eight years of development with the full support of the Government of Kenya and Kenya Power, ERC and KETRACO, the signing of the financing agreements signifies the completion of the project’s financing subject to completing the remaining conditions precedent after which construction will commence and begin producing power in early 2016.

The LTWP project is the largest single wind power project to be constructed in Africa and is to date, the largest private investment in the history of Kenya. The project is a key deliverable under the Government’s commitment to scaling up electricity generation to 5,000MW and to provide cost effective renewable power to the Kenyan consumer. The project alone will produce approximately 20% of Kenya’s currently installed capacity at 7.52 cents/kWh (Ksh9/kWh).  It is also a Vision 2030 flagship project and will be a transformative project in terms of the development impact to the Northern arid areas of Kenya, the electricity sector, and to Kenya as a whole. It is also expected to generate up to US$150 million/year in foreign currency savings to Kenya through fuel displacement costs.

The project’s debt raising is led by the AfDB, as mandated lead arranger, the Standard Bank of South Africa and Nedbank Limited as co-arrangers, EIB, FMO, Proparco, East African Development Bank, PTA Bank, EKF, Triodos, DEG, and OPIC (subject to receiving the final approval). The Government of the Netherlands has also provided a grant of 10 million and the European Union, a subsidized facility through the EU Africa Infrastructure Trust Fund of a further 25 million.

The LTWP project has been under private development since 2005 and that is in itself a remarkable testimony to the stability and soundness of the Kenyan electricity sector as well as the environment for Independent Power Producers, said Carlo Van Wageningen, Chairman, LTWP. We are delighted that this project will move forward with the continued support of the Government of Kenya, Kenya Power, KETRACO the African Development Bank, and the numerous other partners.

The LTWP consortium is comprised of KP&P Africa B.V. and Aldwych International as co-developers and investors, and Finnish Fund for Industrial Cooperation Ltd (Finnfund), Industrial Fund for Developing Countries (IFU), Norwegian Investment Fund for Developing Countries (Norfund), and Sandpiper as investors. Aldwych will also oversee construction and operations of the project on behalf of LTWP.