Loyangalani-Suswa Line: Ketraco offered Sh63bn for new lines

A wind farm. Spain will give €110 million (about Sh14.9 billion) to build a line to transport power from a wind farm in Turkana with counterpart state funding set at €49 million (about Sh6.62 billion). Photo/FILE 

By ZEDDY SAMBU  (zsambu@ke.nationmedia.com)

Posted  Sunday, October 9  2011 at  20:49

International financiers will give Kenya Sh62.6 billion for the construction of transmission lines to enable the country tap into new power plants in the arid north and surpluses from her two neighbours.

Spain will give €110 million (about Sh14.9 billion) to build a line to transport power from a wind farm in Turkana with counterpart state funding set at €49 million (about Sh6.62 billion).

The line is expected to cost about Sh20.6 billion, the Kenya Electricity Transmission Company (Ketraco) said.

A substation to be built at Loyangalani will cost about Sh4.32 billion while Sh190 million will be used to compensate those displaced by the line.

Ketraco said another 400 Kilovolt power transmission line spanning over 1,200 kilometres between Suswa and Sodo in Ethiopia will be financed by the World Bank and African Development Bank (AfDB) at $350 million (Sh35 billion) to tap into that country’s vast hydro sources.

In addition, AfDB is funding the Kenya-Uganda line to the tune of $70 million (about Sh7 billion), according to Ketraco chief executive Joel Kiilu.

Mr Kiilu said the agreement with the Spanish government is set for signing before year end, ahead of part commissioning of a sixth of the plant’s capacity estimated at 300MW or 17 per cent of the national capacity.

“We have the goodwill from financiers. The AfDB has agreed to finance the interconnector with Uganda for $70 million,” said Mr Kiilu in a telephone interview.

Officials of Lake Turkana Wind Power (LTWP) said in an email response that they expect to close the financing by April next year with commissioning of 50MW expected a year and a half later.

“Construction of the generation plant will start at financial close targeted at first quarter of 2012.  The transmission line will start at the same time.

The first 50MW will be commissioned in the last quarter of 2013 and full commissioning of the 300MW targeted approximately nine months after,” said the email response.Private financiers

An agreement between promoters and the private financiers of the project last week shows it will cost €7.52 cents/per kilowatt hour.

This represents a four per cent increase from €7.22, the initial PPA reached in early 2010 before Treasury backed out of securities valued at €42 million that were being sought by financiers, instead granting letters of comfort to delay commissioning of the project.

Project’s owners had in 2009 expressed interest in constructing the line, but the government rejected the move after it emerged that costs would push up the cost of power.

Courtesy of Business Daily