Global IT giant, Google, is set to invest Sh4 billion ($40 million) for a 12.5 per cent stake in the Lake Turkana Wind Power Project (LTWPP).
Under the agreement to be announced Monday, Google will buy a 12.5 per cent equity stake in the Lake Turkana wind farm when it is complete and operational, becoming the first US private investor to fund the project.
Google will join a diverse group of international investors in the project, including the Overseas Private Investment Corporation (Opic), the US government’s development finance institution and Vestas, which is also supplying turbines for the wind farm.
“We’re making a commitment to invest in Lake Turkana Wind Power Project because it makes financial sense and has the potential to have a massive impact on Kenya’s energy grid, helping to accelerate the deployment of renewable energy in one of the world’s fastest-growing countries,” said Joseph Mucheru, Google Energy lead for Africa.
“We look forward to joining Vestas and others to help make the Lake Turkana Wind Power Project a reality and accelerate progress toward a future of clean energy.”
Kenya has shifted its power generation focus to renewable sources such as geothermal, wind and hydro power. It targets to expand installed capacity by about 5,000 megawatts by 2017.
Wind power currently generates only 1.1 per cent of Kenya’s energy mix compared to hydro’s 36 per cent, geothermal 26 per cent, and thermal at 30.1 per cent.
The LTWPP is, however, expected to push the wind energy generation to 15 per cent of the national total.
Once operational, the LTWPP is expected to add 310 megawatts of clean energy onto Kenya’s grid – enough to power more than two million households.
Kenyan businesses regularly complain that expensive and unreliable power supply makes them uncompetitive and hurts growth.
Vestas will deliver and install the turbines for the project while providing maintenance of the plant under a 15-year service and availability contract with LTWPP.
The full 310 megawatts capacity, to be delivered by 365 wind turbines, is expected to be in place by June or July 2017.
The project, originally planned for completion in 2011, delayed in part because it was awaiting a 428-km high-voltage line linking the area. The transmission line was approved in August last year and will take about two years to build.
The project in the Lake Turkana area lies in a corridor of land that receives steady winds throughout the year. It is spread over 40,000 acres (162 square kilometres). But the firm could build on a further 110,000 acres.
Elizabeth Littlefield, Opic president and chief executive, said in a statement that the LTWPP underscores their contribution to the progress of President Barack Obama’s Power Africa initiative.
“The leadership of visionary private sector investors like Google bolstered by catalytic Opic support is at the heart of both Power Africa and lasting, impactful global development,” said Ms Littlefield.
Opic’s role is to mobilise private capital to help address critical development challenges and help US businesses gain a foothold in emerging markets. In June last year, Opic approved up to $250 million (Sh25.6 billion) in debt financing and $46 million (Sh4.7 billion) in political risk insurance to support the LTWPP.
Globally, Google has committed more than $2 billion (Sh200 bilion) to advance 22 clean energy projects. Last year, the firm reiterated its commitment by closing a $12 million (Sh1.2 billion) investment in the Jasper Power Project, a 96MW South African solar photovoltaic plant – its first renewable energy investment in Africa.
“Since investing in the continent’s largest solar project, we have continued to see a big opportunity in fast-growing markets with rich renewable energy resources where both the need and the potential are tremendous,” said Mr Mucheru.