Power from Kenya’s planned Lamu plant cost 10 times well over estimated: study

NAIROBI (Reuters) – Electricity originating from a coal-fired power plant because of be in-built Kenya using a Kenyan-Chinese consortium will surely cost consumers around 10 times beyond planned, a U.S. thinktank says, raising further doubts for the long-delayed project.

Construction of one’s plant within the Kenyan mainland opposite the tourist island of Lamu was scheduled to start out in 2019 but continues to be repeatedly halted, due in some measure to opposition by environmentalists.

Amu Power, a consortium comprising Kenya’s Gulf Energy and Centum Investment including a group of Chinese companies, could be because of build the flower after winning the costa rica government contract.

The plant’s backers say it would help tackle Kenya’s frequent blackouts by increasing generation capacity by nearly an additional and generating electricity would cost about half what consumers currently pay.

But opponents say those charges are much higher than projected.

Amu Power says electricity in the plant cost 7.2 U.S. cents per KWh. That’s “highly optimistic,” the U.S.-based Institute for Energy Economics and Financial Analysis said within a independent study, the actual most extensive until now on the plant’s cost.

It said the 1000-MW coal-fired plant’s 25-year power purchasing agreement would cost consumers beyond $9 billion, regardless if it does not generate any power.

“The genuine costs of Lamu’s electricity during the years 2024 through 2037 could average often US 22 to US 75 cents per KWh – three to Much the company’s 2019 projection,” the case study noted. “We know Kenya should cancel the work.”

The study said the plant’s backers had underpriced coal imports and rising operational and maintenance costs.

Joseph Njoroge, principal secretary on the Ministry of Energy, said be ready was competitive but could not address specific concerns.

“One condition of one’s competitively acquired project is to sustain the bid specifications to the end,” he stated in a text message to Reuters. “Guarana will be be afflicted by (the) objective of producing electricity based on sound economic projections.”

Francis Njogu, boss of Amu Power, do not respond to requests for comment.

Kenya’s Energy Regulatory Commission, which sets tariffs, also failed to respond to a get comment.

The plant’s location at the mainland in the coastal Lamu County region is about 14 km from Lamu island, a famous ancient Swahili settlement and UNESCO World heritage site with a top tourist destination.

Environmentalists the plant will pollute oxygen, destroying mangroves and breeding cause five endangered kind of marine turtles, fish and various other marine life.

In 2019 , a Kenyan court suspended the project for a second time, sending the dispute back up in an environmental tribunal. It really is expected to issue a call later this month on perhaps the project might ahead.