The African Development Bank (AfDB) has approved a US$149.5mn loan for Sub-Sahara Africa’s largest wind power project in Kenya’s Lake Turkana region.

The bank will also source additional funds for the project, which has been hit by delays due to the unavailability of funding. In October last year the World Bank withdrew its risk guarantees for the project, reportedly because it believed that the generated electricity would be too much for the national grid, and would effectively go to waste. The move stalled financial close of the project.

As mandated lead arranger for the project, the AfDB plans to raise an additional US$165.1mn in senior debt and a further US$75.4mn of subordinated debt.

The AfDB confirms to GTR that since finalising its financing portion and launching the project to the public, a number of development financial institutions (DFIs) have expressed interest in the project. These include: the European Investment Bank, Danish export credit agency EKF, French development bank Proparco, and the Development Bank of South Africa.

A spokesperson for AfDB tells GTR that Nedbank and Standard Bank have also recently confirmed their roles as arrangers of the project.

Carlo Van Wageningen, chairman of Lake Turkana Wind Power (LTWP), comments: “The approval of the US$149.5mn financing by AfDB for the LTWP is a major milestone in the development of the project. It is also proof that financial close is now in sight. Seven long, arduous and challenging years have passed since we first dreamt of this wind farm, but the resolve and commitment remains unchanged by all the investors in LTWP. We are eager to start construction on the power plant and finally deliver this project to Kenya.”

The Turkana wind power project will add 300MW to Kenya’s power generation capacity.

“This zero-emission project will contribute in filling the energy gap in the country, enhancing energy diversification and saving 16,000,000 tonnes of CO2 emissions compared to a fossil fuel-fired power plant,” says AfDB regional director Gabriel Negatu.