NAIROBI (Xinhua) --
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
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.