Lake Turkana Wind Farm: Enhancing Access to Clean, Affordable Energy in Kenya
The Turkana Wind Power Project in Kenya will add 300MW to power generation capacity and will benefit Kenya by providing 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. This zero-emission project will contribute in filling the energy gap in the country, enhancing energy diversification and saving 16 million tons of CO2 emission compared to a fossil fuel fired power plant.
The total project cost is €585 million. This will be financed with equity (25%), mezzanine debt (5%) and senior debt (70%). The senior debt will be made up of a Development Finance Institutions tranche arranged by the AfDB Group for €309 million and a commercial debt tranche of €100 million.
Bank Group’s Lead Advisory and Mandated Lead Arranger Role
Turkana Wind Farm will be the largest wind power project in Africa. The AfDB Group, which provided a €115-million loan to the project, has taken a lead role in developing this project, having worked with the project developer since 2009, and is the Mandated Lead Arranger for the transaction. Spearheading the project’s transactions, the AfDB Group built the confidence of potential investors on mitigation of environmental and governance risks, ultimately attracting additional investors in the project such as commercial banks. As the Mandated Lead Arranger for the project, the AfDB Group will raise over €127 million in senior debt and a further €58 million of subordinated debt.
In addition, the AfDB Group is processing an ADF Partial Risk Guarantee for €20 million to cover the risk related to the completion of the transmission line, which is crucial for the project.