Kenya to award 960MW power project to Centum Investment-led consortium

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Kenya to award 960MW power project to Centum Investment-led consortium

Gulf Energy Limited, a consortium led by Kenya's Centum Investment Company Limited and composed by three Chinese companies, has been selected as the preferred bidder by the Ministry of Energy & Petroleum (MOEP) for the mega 960 MW Lamu coal power project in Lamu County, Kenya.

Other bidders protested over the procurement process and threatened to go to court due alleging irregularities in the process.

The winning consortium is formed by:

  • Centum Investment Company Limited,
  • Sichuan Electric Power Design and Consulting Company Limited (SEDC),
  • Sichuan No. 3 Power Construction Company (SEPCC), and
  • China Huadian Corporation Power Operation Company (CHD)

The consortium emerged winner from a list of 26 bidders which included large multinational players from; India, Japan, the USA and Europe.

The tender was floated in September last year when the ministry invited expressions of interest but it was not until January that the deal was put under the PPP.

The winning consortium was among the three teams pre-qualified for the final bidding round who submitted final proposals. It is expected that the winning bidder will sign a Power Purchase Agreement (PPA) for a 25-year period.

Other bidders were:

  • Toyota Tsusho Corporation (later withdrew),
  • Marubeni Corporation (later withdrew),
  • HCIG Energy Investment,
  • Linketh Investment Kenya Ltd and
  • Shanghai Electric Power Company Limited in a consortium with Avic International and Cistenique.

The results of the winning bid was made following a conference today by MOEP, where the Cabinet Secretary in the MOEP, Davis Chirchir, noted that the key demand drivers for power in the next 40 months were Iron & Steel smelting (2000 MW), Standard Gauge & Light Rail (1,171 MW), ICT parks (675 MW) and LAPSSET (350 MW). Davis Chirchir noted that the commissioning of additional power to the national grid was vital to reducing power tariffs.

Centum CEO James Mworia stated:

The Lamu Coal power plant is integral to attaining the country’s objective of increasing generation capacity and significantly reducing the cost of power. The evaluation is a major vote of confidence for the capacity of reputable local companies to lead, fund and own the development of large infrastructure projects within the country in partnership with experienced world class companies.

Gulf Energy CEO, Francis Njogu commented:

Once complete, the power plant will be the single largest power generating plant in East, Central and Southern Africa (excluding South Africa), and will account for approximately 55% of Kenya’s power production measured by today’s installed generating capacity. This transformational project will lower power cost and allow the Kenyan economy to take a major leap forward in positioning Kenya as a globally more competitive investment destination by improving the availability and affordability of powe.

The project will cost approximately US$2 billion, of which approximately US$500 million will be funded by equity and the balance of approximately US$1.5 billion will be funded through debt. The consortium has the proven capability to raise such funds and has already received significant interest from several major international lenders and export credit agencies.

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