BlackRock-managed fund buys 31pc stake in Turkana wind farm

INVESTMENT:  Climate Finance Partnership (CFP), a public-private finance vehicle managed by BlackRock Alternatives has acquired a 31.25 per cent stake in the Lake Turkana Wind Power (LTWP), East Africa’s largest wind farm with a capacity of 310.25 MW.

CFP acquired the shares from the Finnish Fund for Industrial Cooperation (Finnfund) for an undisclosed amount. Earlier, CFP had secured $673 million (Sh88.5 billion) in commitments.

The Helsinki-based Finnfund said the deal has been signed and closing is expected in the second quarter of 2023.

Sustainable energy

“LTWP was the largest equity investment made by Finnfund at the time of commitment. It is also one of the largest private investments in Kenya’s history,” Finfund said.

Finnfund is the third shareholder to put out its stake for sale in the windfarm. In 2020, Vestas Wind Systems (12.5 per cent), a global leader in sustainable energy and the Norwegian Investment Fund for Developing Countries (NORFUND), the Danish wind turbine manufacturer put up their shares for sale.

CFP was conceived by BlackRock Alternatives Management, an investment management company together with the Governments of France, Germany and Japan, as well as US Impact organisations as a green investment fund for developing countries.

LTWP is co-owned by Anergi Turkana Investment Limited, which took over the assets from Norfund in 2021. The wind farm is also owned by Dutch investor KP&P Africa, the Danish Climate Investment Fund through the Investment Fund for Developing Countries (IFU), and Sandpiper Ltd.

The windfarm, located in Loiyangalani District, Marsabit County operates 365 wind turbines, each with an installed capacity of 850 kilowatts. It provides approximately 17 per cent of low-cost energy to the country’s national grid at a fixed price for a period of 20 year, in accordance with the Power Purchase Agreement (PPA) with KP.

The new investors are coming in amid controversy over the payment saga to the national treasury and the ping-pong game over PPA with the Government, the former who have been partly blamed for contributing to inflated electricity bills for consumers.

In 2021, the IPP was in the news for the wrong reasons, having been overpaid Sh785 million by KP, with parliamentarians calling for investigations, with directors saying they had waited for a year for bank account details to refund the government.