US-run fund buys 31 per cent stake in Turkana wind farm

The Lake Turkana Wind Power project.

Photo credit: File

A fund managed by a US multinational investment company, BlackRock, is set to acquire a 31.25 percent stake in Lake Turkana Wind Power (LTWP) which owns a 310 megawatts (MW) wind-powered electricity generation plant in Loyangalani, Marsabit county.

The multi-billion shillings deal with be executed through United Kingdom-based Climate Finance Partnership UK Holdings Limited (CFP) incorporated four months ago on October 31, 2022.

CFP is a partnership between BlackRock and the governments of France (AfD), Germany (KFW), and Japan (JBIC) as well as a number of leading impact US organisations,

LTWP said it will make an application to the Energy and Petroleum Regulatory Authority for approval of the acquisition deal.

“Subject to relevant regulatory approvals being obtained and other various condition precedents being satisfied in relation to the proposed transaction, CFP intends to partner with the existing shareholders of the company to ensure the success of the 310MW wind-powered electricity generation plant at Loyangalani, Laisamis district, Kenya,” the company said.

But even as the parties await to conclude the deal, LTWP currently has six shareholders, namely Anergi Turkana Investments Limited, KP&P Africa B.V, Danish Climate Investment Fund I K/S, Vestas Eastern Africa Limited, Finnfund – the Finnish Fund for Industrial Cooperation; and Sandpiper Ltd.

LTWP that has a capacity of 310 megawatts — enough to power up to one million homes —entered into a power purchase agreement with Kenya Power and Lighting Company in 2009.

Under the power purchase agreement, LTWP was to finance, design, procure, construct, install, test, commission, operate, maintain, and sell net electricity output exclusively to Kenya Power (KPLC).

KPLC on the other hand was required to evacuate all net electric power from the LTWP plant for 20 years once commissioned.

It commissioned its power plant on January 27, 2017, but the government, which built the evacuation line, did not complete the works until September 24, 2019.

The LTWP has faced hiccups including delayed evacuation of power, a position that has resulted in hefty penalties to taxpayers.

For example, taxpayers two years ago footed a Sh18 billion penalty due to delays in connecting the wind firm’s production to the national grid.

The huge payout arose from a 381-day delay in the completion of the 428km high-voltage power line from Marsabit to Suswa substation in Narok, the main interchange for power from different sources.