- We provided technical advice to a pool of lenders – African Development Bank, the European Investment Bank, Standard Bank and Nedbank – contemplating providing debt to the wind project.
- The project comprises 367 850kW Vestas wind turbine generators.
- The developer is Lake Turkana Wind Power (LTWP) and the project constitutes the largest private investment to date in Kenya.
- The wind farm is being built under a multi EPC contract approach, with five main contractors involved in the construction.
- The project capex is €546M.
- Construction is expected to take 32 months from initial notice to proceed.
- A transmission line of 400km will be built from Loiyangalani to the outskirts of Nairobi to export the wind farm's energy. Construction and timing of the transmission line is critical to the project's success.
- Due to the length of the transmission line, the project requires commissioning of a dynamic reactive power compensation system at the Loiyangalani substation.
- The project also requires the upgrade of circa 200km of public roads to carry the turbines from Mombasa harbour to the site, on a distance of 1,000km, stressing the logistics challenge.
- Because of its huge contribution to the Kenyan energy mix, the project requires specific system integration tools to be put in place to dispatch its generation.
- Our due diligence included a review of participants and contracts, system integration, construction and operation, design, energy yield assessment, environmental and social aspects, procurement and financial model.
- We provided a ‘value for money’ analysis on the key construction contracts to benchmark prices proposed against similar contracts worldwide.
- We assisted in the system integration evaluation by contributing to dispatch simulations undertaken and by identifying capacity building needs within the teams.
- To support our work we inspected Vestas and RXPE facilities in China, visited the site and met with local contractors, Kenyan power players and government representatives – including the Prime Minister and Permanent Secretary of the Ministry of Energy.
- We participated in contract negotiations on construction and operations and maintenance contracts and on the PPA, and maintained dialogue with the sponsors.
Value and benefits
- We carried out power system analysis to clearly understand the demand and generation constraints in Kenya and to understand how the project could fit in.
- We raised a number of technical issues in the various contracts and participated in rendering the contractual structure less risky for the lenders.
- Our proactivity in the discussions and our responsiveness to urgent meeting requests from all parties has strengthened the parties’ confidence in our services and commitment and has saved on time.