The UN Security Council has called climate change the “biggest threat modern humans have ever faced” and electricity production is the world’s number one source of the greenhouse gases that contribute towards it. Using clean, renewable energy is one of the most important actions we can take to reduce our impact on the environment and Kenya is at its forefront. The Kenyan government is committed to generating its power from 100% renewable sources, and wind power is the most viable way to achieve this goal. The incentive lies not only in environmental concerns, but also in reducing the cost to consumers: expensive diesel generators are currently used to cover shortfalls in available capacity and this has led to the country’s high electricity costs.
The Turkana Wind Project, a wind farm in the country’s arid north, is at the heart of Kenya’s renewables undertaking. ALN acted for the sponsors of this, the largest power generation project in Kenya. Once completed, it will be the largest wind power plant on the African continent and will provide at least 30% of Kenya’s power demand.
ALN structured and negotiated a bankable 20-year power purchase agreement on a take or pay basis with Kenya Power and Lighting Co. (KPLC), as well as:
the related support letter issued by the Government of Kenya advising and negotiating a credit enhancement package
Completed in 2014, the deal was worth USD 780 million and involved working with a number of world-renowned international law firms, including Allen & Overy, Clifford Chance and CMS Cameron McKenna. For its work on the project, ALN was awarded “African Renewable Deal of the Year 2014” by both Project Finance International (PFI Yearbook Awards) and the IJ Global Europe & Africa Awards, as well as the Africa Investor Infrastructure Investment Awards’ Power Deal of the year in 2015 by Africa Investor.