A barren moonscape, pitted with volcanic craters, arid and inhospitable, and populated by warring tribespeople. That is one view of northern Kenya, and in a sense it is true: but a dualistic world view that only sees ‘challenges’ misses the point entirely. The counties of Turkana and Marsabit have extraordinary qualities. Among these is their wildlife, for example it was the prospect of catching six-foot Nile perch weighing nearly 390 stone that attracted entrepreneur Willem Dolleman to the shores of Lake Turkana in the late 1980s. His main problem was the relentless wind that would take control of his boat – no tent that he could obtain could withstand the force of those winds, and he often had to give in and sleep in his car.
The potential of harnessing those forces for electricity generation was not lost on Dolleman and his friend Carlo van Wageningen, but at that time wind power was still an embryonic technology, and the low cost of oil put it out of contention. Wind power development required subsidies, and none would be forthcoming in Africa. It was not until 2005, when oil prices rose above £50 per barrel for the first time, that they, together with Chris Staubo decided it was time to take another look. The ‘founding fathers’ of LTWP called up Harry Wassenaar and Kasper Paardekooper of KP & P, a company with a history of developing and operating wind power projects, to bring some specialist expertise to the project.
They were highly sceptical. Wassenaar, an old school friend of Dolleman, was however persuaded to come for a holiday. “He fell in love with the place as soon as he saw it,” says van Wageningen. “The wind itself convinced him!” With the help of Henk Hutting another veteran of wind power, if that is the right word in such a new industry, who confirmed the reliability of the wind flow in the area, LTWP was set up in Kenya under the ownership of KP & P BV, and the real work began.
Early this year LTWP chairman Mugo Kibati accepted the Project Finance International (PFI) African Renewable Deal Award 2014 in recognition of the way the project finance was put together up to final financial close in December 2014 – it was considered the best project finance structure achieved in the region over the last couple of decades. “The MoU between Willem Dolleman, Carlo van Wageningen and Chris Staubo was signed in 2005 so it took nine years for us to complete the development phase,” says van Wageningen. That was three years longer than the founding fathers had hoped for, but explicable considering the complexity of the project and the painstaking way in which project and political risks perceived by lenders had to be mitigated,
This was eventually achieved through a temporary levy on the tariffs, paid into an escrow account held by the government but in favour of the lenders. Negotiations were held right up to cabinet level, however this is a project of strategic national importance and all parties wanted it to go ahead. Nevertheless it was with some relief that the partial risk guarantee (PRG) was signed by Mr Kibati and the leaders of the Standard Bank, the National Treasury and the Kenya Electricity Transmission Company (Ketraco) in December last year.
Ketraco is a key partner since it is tasked with building a 428 kilometre transmission line to evacuate the power output from the 300MW wind farm. This EPC contract is worth €142 million, and is being carried out by the Spanish company Isolux Corsán. The line will link Loiyangalani, close to the Lake, to the town of Suswa, on the outskirts of the capital, Nairobi. An additional benefit is that various geothermal plants that will be located along its route will be able to upload their output in the future. Though this contract is not directly overseen by LTWP it is classed as an ‘associated’ contract. “We have to make sure we complete the two project in a harmonised manner so it is ready when we are ready to deliver power from our plant. They have been working since August 2014, and should complete by July 2016 ready for us to come on line with the first 90 MW in October,” says van Wageningen.
Groundworks have also started for the substation that will collect the power from the 365 turbines and feed it to Ketraco’s new transmission line, and the foundations of the turbines themselves. As a preliminary, soil survey drilling is being conducted at each microsite to make sure it can take the 43 metre masts supporting the Vestas V52-850 kW turbines. “We planned it so that when the turbines start coming into Mombasa they are loaded on trucks and driven straight to the site, avoiding double handling at a warehouse.” Delivery will be on a rolling programme, with around 30 turbines arriving each month. Additionally, 110 kilometres of internal roads are being built to reach the turbines on the 40,000 acres estate, held on a 99 year lease from the government.
A word about the siting concept would be appropriate here. Henk Hutting quickly corrected his new colleagues, who had thought the wind a local thermal effect, once they called him in. He explained how two opposing, low level seasonal winds affecting East Africa, the Kaskazi and the Kuzi, run for six months from north east to south west and for six months in a south east to north west direction. Split in one case by the great mountains of Kilimanjaro and Kenya and in the other by the Ethiopian plateau, in each case a portion is directed northward up the Turkana corridor by the constant low pressure of the Sahara. Accelerated by the venturi effect of the hills to the north of Meru, the wind to the south east of the lake averages 12 metres per second or around 27 miles per hour. For the wind turbine designers, the problem was if anything that the site had too much wind!
Now that it is under construction the wind farm seems certain to be delivering low-cost electricity to the Kenyan national grid by the end of next year. At full production its contribution will be equivalent to nearly 20 percent of the currently installed generating capacity of Kenya. “We don’t claim that wind power can be considered baseload (always available), but in fact we achieve good enough load factor, based on eight years of wind measurement on site.
And because the transmission line brings power to this region for the first time, it will transform the lives of the local people. What the effect of development will be upon local conflict, which is rife, remains to be seen, but the more enterprising are already seeing this as a chance to establish trading businesses, commercial fishing, tanneries and other sources of employment and revenue. “As soon as the substation goes live we will be electrifying the largest towns in the area,” promises van Wageningen. The communities of Loiyangalani, Kargi, South Horr and Laisamis, will have access to light, refrigeration and other enabling technologies. Since the transmission line will carry high speed optic fibre as well, they will get better connectivity than many people in rural Europe, he points out.
The money that will come in to this neglected part of Kenya will surely make a difference. Because this is green energy the United Nations registered LTWP under a mechanism that will allow the project to generate carbon credits which will generate some $4million to develop communities around the wind farm. Additionally the company has set up a CSR programme, implemented by the Winds of Change Foundation (a wholly owned subsidiary of LTWP) that funds health programmes and water, sanitation and educational initiatives. Seeded with €500,000 a year, the foundation will be raising further funds to support business development. “Following extensive consultation with the communities to identify their needs we have created a 20 year development plan for the foundation.” The communities have been asked to participate and identify their needs.” The 20 year plan will be delivered in five year segments, he says.
To have secured the largest ever private-sector financing in Kenya with no fewer than ten European and African development finance institutions providing debt and equity is a great achievement. The project will change the lives of millions of Kenyans, and boost the national economy.
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