Why Google Backed Out of Kenya’s Lake Turkana Wind Power Project

Renewable Energy Chief Executive, Sundar Pichai

Indications have emerged that the incessant delays in delivering on Africa’s largest wind farm, Lake Turkana Wind Project was responsible for the cancellation of plans to buy 12.5 percent of the stake by global technology giant Google. The Lake Turkana Wind Project which has a capacity to produce 310 megawatt (MW) of electricity was initially set for completion in 2017, after which Google made commitments to buy the stake from Denmark backed Vestas Group, however, sources at Google say that the tech giant became uncomfortable with the slow pace of the project and incessant delays, even though they are yet to make it official.

Renewable Energy Chief Executive, Sundar Pichai
Renewable Energy Chief Executive, Sundar Pichai

However, a Vestas source said that the delays were primarily due to the transmission line. With the pullout of Goggle from buying the stake from Vestas, efforts are being made by Vestas to enter into commercial dialogues with potential buyers of their shares. This, the source say is because Vestas’ strategy doesn’t include being a long-term wind park owner.

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The wind farm was ready for launch in 2017, but remained idle due to delays in installing transmission lines needed to get the clean power to the national grid and customers. The 428 km power line from Loiyangalani in northern Kenya to Suswa in Narok County was set to be completed by October 2016, but demands for compensation from landowners along the route and other issues delayed it.

The line was further delayed after a Spanish firm contracted to build the line went under. Kenya then tapped a Chinese company to complete it. The Lake Turkana wind farm is expected to provide 15 percent of Kenya’s total electricity needs.

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In recent times, Google has shown some hunger in acquisition of stakes in fields outside its online advertising business. It has also runs other ventures, including investments in renewable energy projects. It has invested billions of dollars in solar and wind power plants with a total capacity of 5,475 megawatts to generate returns besides contributing to efforts in fighting climate change.

Speaking on Google’s desire to invest in renewable energy, Chief Executive Sundar Pichai said in 2017 that “we became the first company of our size to match our entire annual electricity consumption with renewable energy (and then we did it again in 2018) as] a result, we became the largest corporate buyer of renewable energy in the world.”

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Google now has an interest in 52 renewable energy projects around the world, committing more than $7 billion to construction that will create thousands of new jobs. Norfund’s stake in the Turkana power project was acquired in 2013 at a cost equivalent to 1.2 billion Kenyan Shillings. The project cost a total of €623 million $703 million), with debt investors providing 70 percent of the amount or €436 million ( $492 million).

Shareholders, including Norfund, the Danish Climate Fund, Sandpiper and Finnfund, provided the rest of the capital. The project has been credited with boosting Kenya’s electricity supply while reducing reliance on the more expensive diesel-powered plants that harm the environment through pollution.

 

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry