The first of the African Development Fund’s Partial Risk Guarantees (ADF PRG), the Lake Turkana Transmission Line Delay Partial Risk Guarantee, has been approved for US$27mn
The ADF’s partial risk guarantee is a risk mitigation instrument that covers private lenders and investors against the risk of a possible government failure to meet contractual obligations to a project.
It will support the Lake Turkana Wind Power Project in Kenya which involves the development of a 300MW wind farm comprising 365 wind turbines of 850kW capacity each and a 33kV electrical network.
The average electricity production of the project is estimated at 1,440GWh per year.
The Lake Turkana Transmission Line Delay Partial Risk Guarantee will be used to alleviate the risk for the construction of a 428km publicly owned transmission line between Loyangalani and Suswa and associated substations needed to connect the project to the national grid.
The partial risk guarantee will support the Kenyan Government’s on-time delivery of the transmission line and will reduce the risk of it being unable to meet payment obligations. More specifically, it will provide partial risk mitigation to Lake Turkana Wind Power and the providers of debt financing to the project for risks associated with construction delays.
