East Africa’s biggest renewable power projects face land challenges

Huge strides made in East Africa in generation of renewable energy could be in jeopardy, thanks to disputes over land that are stalling progress.

In Kenya the future of the country’s most ambitious wind power projects hangs on the balance thanks to fierce disputes with local communities that are now casting a dark shadow over the future of Kinangop wind power (KWP) project and the Lake Turkana wind park (LTWP).

The two projects, with a combined capacity to produce 360 MW of power and a joint investment of over $800 million, have been hit by disputes that could potentially deny the East African country pole position in renewable energy leadership on the continent.

KWP construction, which was set to start in May 2015, has stalled thanks to civil protests by area landowners, who have not only moved to court alleging plans to grab their land.

Residents held angry protest in 2015 claiming the company was engaged in underhand deals involving local administrators, lands officials, banks and brokers, to swindle them off or acquire land at throwaway prices.

The company — a joint investment between Norwegian PE firm Norfund, South African asset manager Old Mutual and Sydney-based fund Macquarie, which aims to generate 60 MWs of power — has since stalled with no solution in sight, despite intervention by the highest levels of the government.

It has stopped any work at the site located in agriculturally rich central Kenya highlands, and the chief executive, James Wakaba, has been quoted in the media saying that the project would collapse if no solution was found.

This even as General Electric had delivered some 38 power turbines and further signed a maintenance deal, all valued at $5.8 million.

A similar dispute has hit the 300 MW LTWP, arguably Africa’s largest project, but the picture is not as gloomy, with construction having started last year in northern Kenya.

Resident pastoralists have moved to court seeking to halt works at the site, alleging that the company commenced works before compensation is fully settled for part of the 40,000 acre project land.

The community wants to be paid $75 million in total compensation and is contesting reparation for 150 hectares of land.

To the benefit of not only LTWP, but also an investment group fronted by KP&P Africa B.V. and Aldwych International as co-developers, Industrial Fund for Developing Countries (IFU), Vestas East Africa Limited, Finnish Fund for Industrial Cooperation Ltd (Finnfund) and KLP Norfund, the court has refused to halt construction and granted them use of 87 of the contested 150 hectares.

According to Pavel Oimeke, director of renewable energy at the Electricity Regulation Commission (ERC), only a political solution can rescue the KWP project and not government intervention.

“The government has done everything it can to resolve this dispute and ensure the investment is not lost, but at this stage, only a political solution can save the situation and that is what we want the local political leadership to do,” he said in a phone interview.

He is, however, optimistic that the dispute surrounding the LTWP project was minor and finding a solution was easier and in sight.

“The problem at LTWP is not much, a solution should soon be found and progress on the ground is good with construction going on well,” he said.

Kenya hopes to generate about 5,000 MW of power by 2020, nearly all of which would come from wind, geothermal and solar. Power generation currently stands at 2,400 MW.