, NAIROBI, Kenya, Oct 3 – The African Development Bank (AfDB) has approved a Sh2.4 billion Partial Risk Guarantee (PRG) for the Lake Turkana Transmission Line Delay.
A PRG is a risk mitigation instrument that covers private lenders and investors against the risk of a possible government failure to meet contractual obligations to a project.
The Lake Turkana Transmission Line Delay PRG is under the Lake Turkana Wind Project.
The PRG will be used to alleviate the risk for the construction of a 428-kilometre publicly owned transmission line between Loiyangalani and Suswa and associated substations needed to connect the project to the national grid.
The guarantee will support the Kenyan Government’s on-time delivery of the transmission line and will reduce the risk of it being unable to meet payment obligations.
The objective of the Lake Turkana Wind Power Project is to provide clean, reliable, low-cost power and to strengthen Kenya’s national grid by increasing national installed power by approximately 17percent.
Over the long term, the project will help decrease the cost of energy to end-users, increase access to energy in rural areas, increase the national electrification rate, reduce CO2 emissions, and decrease fossil fuel dependence.
“There is growing demand for electricity in Kenya. The Government of Kenya has traditionally relied upon providers of emergency generation capacity, which despite the advantage of a rapid installation time, is very expensive and load shedding frequently occurs,” Energy and Environment Acting AfDB Director Kurt Lonsway said.
The AfDB Group has Sh13.5billion loan to the Lake Turkana project since 2009.
“This ADF PRG will promote foreign direct investment in Kenya and crowd in private financing for power generation,” Lonsway noted.
The Africa’s biggest wind power project, involves the development of a 300 Megawatts wind farm comprising 365 wind turbines of 850kilowatt capacity each and a 33kV electrical network.