23 February 2016

Kenyan Wind Power Project Cancelled Due to Land Disputes

Nairobi — A $144 million Kenyan wind power project backed by a joint venture between Macquarie Group and Old Mutual Investment Group has been cancelled due to opposition from local landowners and farmers, developer Kinangop Wind Park said on Tuesday.

Kinangop's 60.8 megawatt (MW) project in Nyandarua County in central Kenya was due to come online by mid-2015 but progress was hobbled by disputes with residents over compensation for land.

Last year, local farmers also opposed the project, saying they would be forced to sell their land. They also said the turbines could cause health problems, which the developer denied.

Kinangop in a statement seen by Reuters on Tuesday said protests by locals had made it difficult for workers to build the wind farm.

"Due to the consequent material delay, project funds have been depleted and the project can no longer be completed by the shareholders," it said.

The project had aimed to provide electricity to an estimated 150,000 Kenyan homes by 2018.

Its failure is a setback for the East African nation's drive to increase its power generation capacity by 5,000 MW in the five years to end-2017.

Kenya's other wind power projects include the 300 MW Lake Turkana Wind Power site in the north of the country.

Kinangop's main investor is Africa Infrastructure Investment Fund II which is advised by African Infrastructure Investment Managers, a joint venture between Macquarie and Old Mutual.

The rest of the stake is held by Norway's investment fund for developing countries, Norfund.

General Electric had won the contract to supply the plant's turbines.

Writing by George Obulutsa; editing by Duncan Miriri and Jason Neely

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