The bank’s East Africa Regional Director Gabriel Negatu said they took the step to express confidence in the project and attract more financiers.
The project will add 300 Megawatts to the power generation capacity in the country and provide clean and affordable energy that will reduce the overall energy cost to end consumers.
Furthermore, the project will allow the landlocked Great Rift Valley region to be connected to the rest of the country through the improved infrastructure linked to the wind farm, including a road, fibre-optic cable and electrification.
“As you know we are the lead arranger in this project. We will be acting like conveners of other financiers,” Negatu said during the announcement in Nairobi.
He said the project will be fully implemented by Lake Turkana Wind Power, a special purpose vehicle, created in September 2006.
“The group of other investors includes Kemperman Paardekooper; Partners Africa, Aldwych International Limited, the Investment Fund for Developing Countries of Denmark, Norfund, and Vestas Wind Systems AS,” he added.
It will include the construction and operation of a 300 MW wind farm with 365 turbines of 850KW capacity each.
As requested by the Government of Kenya, AfDB will provide a partial risk guarantee to the project against the risk of delays in the construction of the transmission line, thereby providing additional comfort to prospective lenders.
“This is a major milestone in the development of the project. It is also proof that Financial Close is now in sight. We are grateful and we salute AfDB’s commitment and unwavering support to the project,” Lake Turkana Wind Power Chairman Carlo Van Wageningen said.
The AfDB has taken a lead role in developing what will be the largest wind power project in Africa.
Spearheading the project’s transactions, the bank built the confidence of potential investors on mitigation of environmental and governance risks, ultimately attracting additional investors in the project such as commercial banks.
The plant will be located in Loiyangalani in Marsabit County on 40,000 acres of land.
The country’s current supply stands at 1279MW comprising hydro, thermal, geothermal and Mumias bagasse, against a recorded demand of 1300MW.
The project will complement other transactions currently underway, which are also supported by the AfDB, including Thika Thermal Project and Menengai Geothermal Power.