The African Development Bank (AfDB) says it will guarantee the financiers of the Lake Turkana Wind Power Project(LTWP), an agreement expected to be signed with the government in February next year.
The bank which was initially among the lead financiers of the project will now provide the Partial Risk Guarantee (PRG) to the financiers after the World Bank pulled out.
AfDB Regional Director Gabriel Negatu told Capital Business that the bank took the step after a long search for an insurer, which could have seen further delay of one of the biggest power projects in Africa.
"We are currently in discussions with KenGen and of course the Ministry of Energy to finalise the agreement. Everything is going on well and I am sure we will be done by early next year. After that the project will be ready to go," Negatu said.
The World Bank pulled out over fears that the power plant was too big for Kenya's power grid and may produce huge amounts of electricity that may go to waste, hence deny LTWP revenues, and hurt its position to pay creditors.
Some of the financiers interested in the project include the Standard Bank of South Africa, Nedbank Capital of South Africa and the European Investment Bank.
"You know our friends retreated but this is a big project under the Kenya's Vision 2030 and we are very positive that it will go through," Negatu added.
The project was supposed to start in July this year but has since been delayed after the financiers gave the conditions before they commit their funds.
Once complete, the project is expected to provide 300Megawatts of low cost wind power to the Kenya national grid, equivalent to approximately 20 percent of the current installed electricity generating capacity.
The plant will be located in Loiyangalani in Marsabit County on 40,000 acres of land.
The country's current supply stands at 1279MW comprising of hydro, thermal, geothermal and Mumias bagase, against a recorded demand of 1300MW.