Kenya’s Lake Turkana Wind Project Delayed Again by Lending Talks

Oct. 16 (Bloomberg) -- Kenya’s Lake Turkana Wind Power Ltd. said financing talks will again delay the start of construction of a 611 million-euro ($795 million) wind farm, billed as sub-Saharan Africa’s largest.

The groundbreaking for the project, which will add 300 megawatts or about a fifth of Kenya’s present generating capacity to the national grid, will take “maybe another three or four months,” Chairman Carlo van Wageningen told reporters today in Nairobi. It had been scheduled for April, he said.

“We are now waiting for the financial close that we are negotiating with our lenders,” he said. The African Development Bank, the lead lender, and co-arrangers Standard Bank Group Ltd. and NedBank Group Ltd., are in talks with the European Investment Bank and the development banks of France, Germany and the Netherlands, he said.

The Lake Turkana project is part of Kenya’s drive to invest in road, ports and energy infrastructure to produce sustainable double-digit growth by 2030. The continent needs to spend at least $93 billion annually until 2020 to address the lack of roads, ports and power plants, according to the AfDB.

Kenya Power Ltd., the East African nation’s monopoly power distributor, has agreed to buy 300 megawatts of electricity over two decades from the project in the nation’s remote and arid northwest.

Financing for the Lake Turkana project was expected to have been completed by October 2011. The lead lenders are negotiating with France’s Proparco investment agency, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden NV, the Dutch development lender known as FMO, and Germany’s Deutsche Investitions und Entwicklungsgesellschaft mbH, a unit of Germany’s state-owned KfW Group, van Waginengen said.

The project will comprise 365 wind turbines, each with a capacity of 850 kilowatts, to be installed on 40,000 acres, according to the company’s website. Lake Turkana Wind Power leased 150,000 acres of land in an area with a capacity to produce 2,000 megawatts of wind power annually, van Wageningen said in January.

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