31 January 2018

Kenya: Chinese Firms Get Sh9.6 Billion Turkana Power Line Tender

A consortium of Chinese companies has been awarded a Sh9.6 billion contract to complete the transmission line linking Lake Turkana Wind Power to the national grid by August 31 following the termination of a Spanish firm's contract last year.

The firms, NARI Group Corporation and Power China Guizhou Engineering Company, have committed to pay a fine of Sh1.3 billion (€10 million) per month should they fail to meet the August 31 deadline.

The 428-kilometre power line is currently 70 per cent completed, according to Kenya Electricity Transmission Company (Ketraco) which Tuesday signed the contract with the Chinese companies.

It had stalled following the termination of the contract with Spanish firm Isolux last August after it was placed under receivership over debt and liquidity challenges.

The line will evacuate the wind electricity from the northern town of Marsabit to Suswa substation in Narok, the country's main interchange for power from different sources.

The developers of the Lake Turkana Wind Power have already fined Kenya Sh5.7 billion for the delays of the high-voltage line (400 kilovolts).

Further delays

The Energy ministry early this month said further delays beyond June would attract a Sh1 billion fine monthly to be absorbed by taxpayers through their power bills.

"The government is discussing with the developers to work with the new August 31 timeline, not June. That's why the contractors have committed to pay the fines themselves should there be delays of their making," said Ketraco managing director Fernandes Barasa.

The Chinese contractors have been involved in other local works in Olkaria steam fields, Naivasha.

Failure to connect the wind farm to the national grid had left the developers stranded with power, amid pressing cash needs such as loans repayment.

Ready for launch

Danish wind turbine maker Vestas Wind Systems, the supplier of the wind farm's 365 turbines, said last year the farm was ready for launch but would be idle until the government installs the transmission line.

Construction of the power line started in November 2015 but was delayed by landowners' compensation demands and last year's termination of the Isolux contract.

The wind farm, the largest in Africa, with a capacity of 310 megawatts -- enough to power up to one million homes -- was supposed to inject the first 50 megawatts into the grid in October 2016 and the whole capacity by last July.

The Treasury allocated the Sh5.7 billion in a September supplementary budget to be wired to Lake Turkana for last year's delay and fine will be recovered this year from consumers via monthly bills.


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