Power Africa
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Power Africa

Monitoring raptor activity at Kipeto means long hours in the field. Credit — David Wilson.

The Long Road: Bringing Kenya’s Second Largest Wind Farm to Financial Close

By: Jeremy Faber, Power Africa Communications Team

Craftskills, Kipeto staff and community members cut cake at a prayer ceremony to mark the start of a 80+ house-building program at the Kipeto project site. Credit — Kipeto Project.

Partnership in Action

If it takes a village, as the old saying goes, then closing a large-scale power project takes a city. After acquiring a majority interest, Actis, the sponsor and lead investor, convened many divergent interests at the negotiating table, and alleviated enough concern across the board to close the project. Who were the other players, you ask?

  • Power Africa and the U.S. Agency for International Development (USAID/Kenya) provided critical technical assistance to Kenya’s Energy Regulatory Commission (ERC), the Kenya Power and Lighting Company (KPLC) and the Kenya Electricity Generating Company (KenGen) on the integration of intermittent renewable energy sources into the grid, and also in the development of a new grid code with technical requirements for performance of intermittent sources of energy.
  • Power Africa partner African Trade Insurance (ATI) is providing a standalone guarantee to cover up to three months of potential late payments by the offtaker, KPLC.
  • General Electric (GE), a longstanding Power Africa partner, has been involved in the development of Kipeto for nearly a decade and will supply the wind turbines.
  • Power Africa partner African Infrastructure Investment Managers (AIIM) led the Kipeto project from 2014–2017, and was instrumental in negotiating the PPA and EPC, and leading community engagement.

Overcoming Obstacles

A brief history of the Kipeto Wind Farm site: Long recognized as a place rich in wind resources, the first wind turbine was installed as a gift from the Belgian government in 1993; over the next 18 years, the generation footprint grew slowly, adding a few turbines, but it remained a small operation; in 2011, negotiations on a new Power Purchase Agreement (PPA) began for a large-scale project. The vision was for 100MW of operational power to be online by 2017. After fits and starts, the PPA was finally signed in 2016, and from its inception, Power Africa has been been helping advance negotiations with all players, including the Kenyan Ministry of Energy and the National Treasury.

The Kwenia cliffs near Kipeto are a key nesting site for Rüppell’s Vultures. Credit — David Wilson.

In Dr. Bennun’s own words, “USAID funding was crucial. It allowed us to take the theory of how we’d achieve net gain, and turn this into a practical Biodiversity Action Plan with the close engagement and input of NGO stakeholders. It also supported us to oversee further data collection, which significantly improved the evidence base and built confidence in our predictions.”

Vultures and a Marabou stork descend to feed at Kipeto. Credit — Dominic Kimani.
The first family in the community accepts their new house in October 2018. Credit — Kipeto Project.

Moving Forward

Power Africa is pleased that the assistance provided to the Kipeto project not only helped get that deal unstuck, but also demonstrates the value of the Power Africa Toolbox throughout the project development lifetime. Without numerous interventions across a wide spectrum of support, the project would not have reached financial close in December, and would not be on track to be providing power to Kenyan homes and businesses by 2020.

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Power Africa

A U.S. Government-led partnership that seeks to add 30,000 MW and 60 million electricity connections in sub-Saharan Africa by 2030 > https://bit.ly/2yPx3lJ