Idle Turkana wind power costs taxpayers Sh18bn

LTWP0802s
LTWP0802s

What you need to know:

  • Taxpayers paid private investors Sh18 billion due to delays in connecting the Lake Turkana Wind Power (LTWP) to the national grid.
  • The huge payout arose from a 381-day delay in completion of the 428km high-voltage power line from Marsabit to Suswa sub-station in Narok, the main interchange for power from different sources.
  • LTWP commissioned its 310 megawatts power plant on January 27, 2017 but the government, which built the evacuation line did not complete the works until September 24, 2019.

Taxpayers paid private investors Sh18 billion due to delays in connecting the Lake Turkana Wind Power (LTWP) to the national grid.

The huge payout arose from a 381-day delay in completion of the 428km high-voltage power line from Marsabit to Suswa sub-station in Narok, the main interchange for power from different sources.

LTWP commissioned its 310 megawatts power plant on January 27, 2017 but the government, which built the evacuation line did not complete the works until September 24, 2019.

“Due to delays in completing the transmission line, energy charge was not evacuated from LTWP plant resulting in accrued penalties to the government referred to as deemed generated electricity (DGE) claims amounting to Sh18,499,082,672 (euros 167,261,145) for the period January 27, 2017 to September 10, 2019,” Nancy Gathungu said in a special audit of LTWP.

Already, the government has paid Sh10.3 billion to owners of LTWP leaving a balance of Sh9.8 billion (euros 81,577,128).

“The balance (Sh9.8 billion) is to be recovered by LTWP Ltd through a tariff increase by Kenya Power and Lighting Company (KPLC) of Euros 0.00845/Kwh for the period June 1, 2018 to May 31, 2024 (DEG recovery period) and likely to be borne by the consumers,” Ms Gathungu said.

The wind farm, the largest in Africa, with a capacity of 310 megawatts — enough to power up to one million homes —entered into a power purchase agreement (PPA) with KPLC in 2009.

Under the PPA, LTWP was to finance, design, procure, construct, install, test, commission, operate, maintain and sell net electricity output exclusively to KPLC.

KPLC on the other hand was required to evacuate all net electric power from LTWP plant once commissioned for a period of 20 years.

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