Tuesday, 5 April 2011

Turkana wind power project to benefit from carbon credits sale

25 March 2011

NAIROBI (Xinhua) The Lake Turkana wind power project will generate 25 million U.S, dollars every year from the sale of carbon credits, Kenya government announced on Saturday. The wind power generation project planned to start being constructed by December this year is expected to generate 300 MW of electricity, becoming the largest wind power farm in Africa. "The company had said that this money comes to the government as revenue, but we agreed that it should be used to finance social projects in Turkana", Treasury Permanent Secretary Joseph Kinyua told journalists on Saturday.

Kenya recently announced the formation of the first carbon credits exchange market, the Africa Carbon Exchange to be run by a private company. The country has announced its intention to set another carbon exchange platform to tap into the growing opportunities of carbon credit market in both the government and private sector projects that are using clean energy and investing in afforestation projects. Kenya has also rolled out investments in geothermal energy as part of the grand plan to exploit the renewable energy resources in the country. Geothermal will also earn carbon credits.

The wind power project is expected to open up Turkana region, a dry land located in northern Kenya and inhabited by pastoralists. The area is among the poorest in Kenya but this new deal will mean adequate resources for development will be available. The company will transmit it to the national grid through a 428 km overhead line that is to be constructed by the Kenya Electricity Transmission Company (KETRACO). KETRACO announced earlier plans to build transmission lines dedicated to the green energy generation belt, stretching from Turkana, Marsabit through Rift Valley to Ngong Hills near the capital Nairobi.

Kenya government on Saturday gave a Letter of Support of the Lake Turkana wind power, enabling the company to source for financing and ending a financing deadlock of three years. "This is not a letter of guarantee, but an indication of support showing Kenya government is very much willing to have this project", said Kinyua. He said since the letter was not a credit guarantee, Kenya's debt position will not be affected adversely. "We now look up to breaking ground by December and have the initial 50 MW running on the national grid by September 2013 and at full capacity by mid 2014", said the chairman of Lake Turkana wind power Carlo Van Wageningen. "The letter of support from the government of Kenya will heavily boost our applications to our financiers", he said.

The company also signed a power purchase agreement with Kenya's sole electricity distributor, Kenya Power and Lighting Company. The 600 million Euro project is among the single largest investment in Kenya history. It is expected to generate 50 MW within the two years and to be in full capacity in two years. Demand for electricity in Kenya is expected to increase as the country implements projects to enable the country achieve middle income status by 2030. The bulk of Kenya's electricity estimated at 1,140 MW currently comes from the rainfall vulnerable hydropower sources 67%, 32% from thermal sources and only 5% from geothermal. Kenya is estimated to have geothermal capacity of 2,000 MW.