Construction of the Lake Turkana Wind Power farm is expected to commence in February 2015, after the signing of an agreement for related risk guarantee insurance by two banks.
The signing of the deal puts an end to a long search for an insurer of the project by Lake Turkana Wind Power Limited. The search had stalled the implementation of the project increasing the total cost of the project from the initially estimated cost of US$717m to US$ 764m. This was due to the extension of contracts the company had entered into with contractors.
The African Development Bank (AfDB) and the Standard Chartered Bank now will insure Lake Turkana Wind Power Limited for a maximum of US$ 24m, an initiative that will allow for continuation of construction works for the project.
The guarantee covers the risk of failure by the government through the Kenya Electricity Transmission Company (Ketraco) to develop the necessary infrastructure to take the electricity generated into the national grid. It will also cushion Lake Turkana Wind Power Limited if Kenya Power fails to pay as agreed in the power purchase agreement between the two.
The Lake Turkana Wind Power project (LTWP), which sits on 40,000 acres (162km2) of land Loyangalani District – Marsabit West County in the Northern Kenya, will provide 300 MW. Construction of the wind farm is expected take 32 months.