Sh21bn Lamu wind project in limbo
Wednesday, May 22, 2019 10:22
By KALUME KAZUNGU
The setting up of a Sh21 billion wind power plant in Mpeketoni, Lamu West Constituency, now stands in limbo after the key financier of the project threatened to withdraw, citing frustrations from Kenya Power in approving and signing the Power Purchase Agreement (PPA).
The 90 megawatts Baharini Wind Power Company project is backed by a consortium comprising Belgian firm Elicio Company and Kenya’s Kenwind Holdings Limited.
In an interview Tuesday, Baharini Wind Power project director Susan Nandwa accused Kenya Power of failing to approve and sign the PPA even after getting the energy regulator’s consent to do so. The project was to start in 2016.
“The Board of Directors in Belgium, which is the financier of the project, is tired of the many frustrations and wants to withdraw. We’re being taken in circles.
“The first tariff was 12 cents, and then they changed to 11 cents. Now we’re told it has been lowered to only seven cents. Despite all that, we’re determined to establish the project. The problem is now with the KPLC (Kenya Power).
“They were given the PPA to approve and sign but they’re still reluctant to do so. Something needs to be done urgently so that this project can kick off without further delays,” said Ms Nandwa.
However, acting Kenya Power CEO Jared Othieno Tuesday denied the claims, instead accusing Baharini of having failed to meet key conditions required for approval of the PPA.
“It’s true we have the PPA with us, but we’re waiting for Baharini Wind Power to meet certain requirements before approving and signing the project.
The KPLC Board will soon meet and discuss with the investor to know whether all requirements have been met. People should understand that approving a PPA is a process,” said Mr Othieno.
The initial project plan includes up to 38 turbines with 90MW capacity to be constructed within 3,206 acres of land at Baharini Village, which is located about 40 km from the new Lamu Port South Sudan Ethiopia Transport (Lapsset) corridor project in Kililana.
There has also been a standoff between the investor and the Energy Regulatory Commission (ERC) over issuance of the Commercial Operations Date (COD) with the energy regulatory body initially proposing to have the PPA for the 90MW Wind project divided into two, where 50MW and 40MW would be generated by different plants at the same site.
The ERC however last year gave its approval for the project to kick off by issuing the COD with commencement dates of January 2021 and 2022 respectively.
This gave a ray of hope to the investor who argues that the plants can now be financed as a single project just like the PPA provides for.
But Ms Nandwa says they have now been subjected to too many adjustments since the initial tariff of 12 cents that has now been lowered to seven cents.