Critical Resource analyses political and stakeholder risks around Africa’s largest wind farm, which faces many of the same challenges long familiar to extractive projects.
- The Lake Turkana Wind Power project is located in northern Kenya, on the eastern shore of Lake Turkana. Construction commenced in late 2014 after several years of delays caused by investor concerns and community opposition. First power production is expected in late 2016. The developer, Lake Turkana Wind Power Ltd (LTWP), is a consortium which includes Aldwych International, Vestas and Norfund. Project lenders include the African Development Bank and the European Investment Bank.
- The wind farm will eventually contain 365 turbines, each with a capacity of 850kW, making it the largest wind farm in Africa. The project has a budget of KSh70bn (US$685m) and represents the single largest inward investment to Kenya since independence. Once construction is completed, the project is expected to contribute 310MW of energy to Kenya’s national grid, the equivalent of around 20% of current electricity capacity.
- The Lake Turkana Wind Power project demonstrates that community and government relations are becoming an increasing source of concern for developers of renewable energy projects. Community management is especially critical for wind developments, as they have a large physical footprint which can raise problems around land management. Meanwhile, strong government relationships are vital in ensuring that power sectors are efficiently run and that suitable and sustainable power purchasing agreements are negotiated.
- The Lake Turkana wind farm will be located in the most remote and impoverished area of Kenya. It is populated largely by nomadic pastoralists who have had limited access to formal education. Tribal tensions arising from resource scarcity are common, and can result in violence. A development the size of the planned wind project will inevitably impact traditional community relations and land uses. This has the potential to inflame existing tensions and to drive inequalities that could lead to further conflict.
- The developer has conducted extensive impact assessments and has community management, local employment and social investment programmes in place. Nonetheless, the project has attracted significant opposition among some local communities. An alliance known as the Sarima Indigenous People’s Land Forum has brought a lawsuit against the developer, claiming that land titles were illegally obtained. Notably, the grouping has publicly stated that it is not opposed to the project in principle, but objects to the privatisation of land and LTWP’s alleged lack of community consultation. The developer strongly denies these allegations and asserts that land leases were obtained through due legal process. The case currently rests with the High Court of Kenya.
- At a national and international level, the project enjoys significant support and features a number of high-profile international investors. Backers believe that the project will contribute significantly to Kenyan energy diversification, power supply and economic growth. While this coalition is currently strong, it has previously suffered from divisions. In 2012, the World Bank withdrew funding on economic grounds, saying that the Kenyan grid would not be able to absorb all the energy produced. Since the Kenyan state utility is obliged to buy all the energy produced, this could leave the Kenyan government and ultimately taxpayers footing the bill for excess energy. This could potentially erode public support for LTWP and for renewable energy developments more broadly.
- The project is the most ambitious in a series of large-scale renewable energy projects under construction in Africa. The continent has become a popular destination for solar and wind investments due to abundant resources and the associated potential economic development benefits. Many regional governments, with support from donors and development banks, are actively promoting investment into renewable energy, foremost among them Morocco and South Africa.
This article uses Critical Resource’s LicenseSecure™ model to assess the likely level of political and stakeholder risk. Our updates provide a rapid overview of new or updated ratings in our database, with a focus on projects in the news. Please note that these ratings updates are provisional, based in part on open source analysis and are not from client projects. Full LicenseSecure analyses are in-depth, involve extensive intelligence gathering and are confidential.