The consortium that won a tender to construct a coal-fired plant in Lamu is seeking Sh18.2 billion from local banks ahead of groundbreaking in September.
Amu Power Company, a consortium bringing together firms like Gulf Energy and Centum Investment, said it had opened talks with undisclosed lenders for the funds translating into about 10 per cent of the total cost of the Sh182.6 billion ($2 billion) project.
Construction of the 981.5 megawatts plant is expected to start on September 30 and will take 21 months to produce electricity at Sh6.86 (¢7.52) a kilowatt hour, a third of the price of diesel-fired plants at Sh22.60.
Amu Power CEO Francis Njogu said the project will be financed through debt which accounts for slightly over three quarters ($1.4 billion) with shareholders’ equity of $500 million.
“We have already signed $1.2 billion (Sh109.5 billion) from the Industrial Commercial Bank of China and are negotiating with banks for the other $200 million (Sh18.2 billion),” Mr Njogu told the Press in Nairobi Tuesday.
The African Development Bank (AfDB) will provide a partial risk guarantee for the coal plant, the largest in East and Central Africa.
The construction is expected to create thousands of jobs for machine operators, engineers and administrators and stimulate consumption of building materials — cement, steel and stones.
The plant is part of the planned Lamu Port South Sudan-Ethiopia Transport corridor and is set to place Kenya among nations which rely on coal energy such as South Africa, the US and China.