Kenya agrees guarantees to unblock wind farm pipeline

KENYA - The government has agreed to guarantee loans to help unlock up to $1.6 billion of investment in wind power projects.

31 August 2010

Kenyan finance minister Uhuru Kenyatta
Kenya’s cabinet has decided to set aside $209 million which will guarantee letters of credit issued by the Kenya Power and Lighting Company.

A number of renewables projects, including wind power facilities, in Kenya had stalled after lenders raised concerns over the guarantees.

The move mow means the projects, which include the 300MW Turkana wind farm, are now likely to proceed.

Kenya’s Treasury had fought the Ministry of Energy over the new guarantees, after its success in reducing public debt.

Debt in Kenya fell from 65 per cent of GDP in 2002 to the current 43 per cent.

The Treasury had been reluctant to issue sovereign guarantees to massive energy projects, arguing that the debt exposure would jeopardise the country’s international credit rating.