CONSTRUCTION works at the proposed $2 billion (Sh210 billion) Lamu coal-fired power plant will start on December 7, the project’s developer, Amu Power Company, insisted on Friday.
Amu, which was formed by Gulf Energy, Centum Investments and Power Construction Corporation of China, had earlier planned to break ground on September 30 for the 981.5-megawatt plant – Kenya's first ever coal project.
The consortium won the tender last September but faced but objection losing consortium of Hebei Construction Investment Group and Liketh Investments unsuccessfully challenged beforePublic Private Partnership Unit’s petition committee. The matter was determined on January 3.
Amu Power chief operations officer Cyrus Kirima said on Friday the project lost four months during that legal battle.
The company however assured of a timely completion of the project to be funded by equity to the tune of about $450 million (Sh47.3 billion) and $1.35 billion(Sh141.9 billion) in debt.
“Preliminary work on the ground is expected to begin on December 7. We are ahead of schedule in terms of project implementation,” said Kirima.
The project’s timeline however still depend on an ongoing Environmental and Social Impact Assessment to be presented to the National Environment Management Authority for consideration by end of next month.
The report has been delayed by an ongoing Resettlement Action Plan for the project which will sit on 880 acres of land at Manda Bay, Lamu county.
The resettlement plan is being spearheaded by the Energy and Petroleum ministry and the National Land Commission.
NLC director for valuation and taxation Salome Munubi said the plan’s deadline is October 30, with a preferred resettlement of affected families rather than monetary compensation.
“We have started the process of land acquisition so the project is on course,” said Munubi.
Ministry of Energy chief geologist John Omenga said the plant will adopt the clean coal technology as one of the requirements in the tender.
Construction of the plant is expected to take 21 months and sell at 7.52 US cents(Sh7.94) per kilowatt-hour at under a 25-year Power Purchase Agreement with Kenya Power, which is close to a third the cost for the diesel-fired plants.
The proposed Lamu coal-fired power plant is part of the government's plans to generate 1,920MW of electricity from coal by December 2017. More electricity is being tapped from geothermal wells (1,600MW), Liquefied Natural Gas (700MW), wind (650MW) and hydro (420MW).