The ministry of Energy has said the Lake Turkana Wind Power project must go on despite uncertainty on World Bank support for the project.
Energy Permanent Secretary, Patrick Nyoike said failure to finish up the project on time would cost the country about Sh59.3 every year it is delayed to get emergency power to meet the energy demands.
The ministry issued a statement following reports that the World Bank had pulled out of financing the LTWP. The bank was to co-guarantee the €582 million debt (Sh63.4 billion) with the lead financier being the African Development Bank.
"If energy from Lake Turkana plant were to be replaced with emergency power, it would cost the economy an additional Sh34.3 billion annually, until a permanent replacement plant is installed," said Nyoike in the statement.
"If permanent medium speed diesel plants are brought in as replacement, additional costs to the economy would be Sh25 billion annually," he added.
Nyoike, however, did not say what funding options the ministry is exploring to ensure the project gets completed as scheduled. "Given the difficulties experienced in bringing the projects to a financial close, it would be imprudent to derail a power project which is ready and which would provide for nine per cent of the energy needs in the country in form of green energy," he said.
The total energy expected to be generated from lake Turkana plant is about 300MW, about nine per cent of the total energy demand for the country.
When the wind power comes on board, the grid will have 590MW from Geothermal, 700MW of hydro capacity and 700MW of medium speed plants.
The cost of generating power from Lake Turkana is projected at Sh8.37 per KWh, which is about 52 per cent of the fuel cost for permanent thermal plants and 32 per cent for the emergency power. "Curtailment of energy is, therefore, not foreseen under the probable generation planting program," Nyoike said.
The country's current supply stands at 1279MW comprising of hydro, thermal,geothermal and Mumias bagase. This is against a recorded demand of 1300MW.
There is also an unmet demand of 200MW arising from system interruptions and a weak distribution system. World Bank said it made the decision because the wind power would not serve the purpose of reducing cost of electricity for consumers as long as Kenya Power held the exclusive power purchase agreement.