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Kenya to kick off construction of 960MW coal plant

NAIROBI (Xinhua) -- The construction of a 960 megawatt coal plant in Kenya’s coastal region is set to kick off after procurement’s petition committee gave it approval on Tuesday.

The Public Private Partnership (PPP) Committee dismissed case challenging the award of 1.86 billion U.S. dollar Lamu Coal plant tender to a consortium led by Kenyan companies Gulf Energy Limited and Centum Investment, saying award was within the law.

“The prayer to quash and annul the award of the tender to the fourth respondent is hereby rejected. The request by the petitioner for re-evaluation of the financial bids is hereby disallowed,” the committee chairperson Kihara Muruthi ruled.

The power plant will account for approximately half of Kenya’s power production measured by present installed generating capacity.

Of the project’s 1.86 billion dollar cost, approximately 450 million dollars will be funded by equity and the balance of about 1.35 billion dollars will be funded through debt.

“We are pleased that the PPP Petition Committee has heard and determined the petition and ruled in favor of the Centum-Gulf Energy Consortium,” said Centum CEO James Mworia.

“We will now work hard to recover the time lost since the award of the tender to the consortium in September 2014 and look forward to delivering affordable and cheaper power to Kenyans,” he added.

Mworia said the confirmation of the award of the project to the Consortium would give local investors an opportunity to participate in this important power project.

The Lamu power plant will initially use imported coal, and later convert to use of locally developed coal from Mui Basin, Kitui County. Power generated from the coal plant will be sold to the Kenya Power and Lighting Company Limited (KPLC) under long term Power Purchase Agreements (PPA) framework.

The decision to invest in coal power plants comes after it dawned on the government that several planned geothermal plants might stall due to financial constraints.

The East African nation has a huge mineral potential, but its exploration efforts have only picked in the last five years, with the awarding of commercial licences in prospecting for oil, gold, coal, geothermal and rare earths. 

             

 

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