Push to set up Kes200Bn Coal-powered Plant in Lamu County hits a snag

A dispute over financing regulations and environmental concerns is clouding plans to set up Sh200billion coal-fired power plant in Lamu County.

Four United States senators led by Bernie Sanders have written to the African Development Bank (AfDB) executive director expressing Tarik Al-Tashani advising against financing of the Chinese-backed coal plant, saying the move will be counterproductive to Kenya’s climate goals in building a sustainable energy system.

“We are writing to urge you to vote against financing the development of a Chinese-backed Lamu Coal Plant in Kenya,” said the legislators in a letter dated May 28, adding that, “not only is the project financially unsound, it would also tarnish Kenya’s reputation as a leader in clean energy, worsen environmental quality and result in millions of tonnes of annual carbon dioxide (CO2) emissions.”

According to estimates, the project would emit as much as 8.8megatonnes of carbon dioxide per year, with the plant’s construction also felt could further contribute to global climate change, undermining the country’s commitment to reduce emissions under Paris climate accord.

The project which is being undertaken by Amu Power Company, a consortium of Gulf Energy and Centum Investment, is set to be established at Kwasasi Village in Lamu West and will sit on a total of 975 acres of land. The project is expected to generate 1,050 megawatts (MW) of power upon completion.

“Furthermore the emissions from the coal power plant would result in detrimental health impacts caused by high levels of local air, water and soil pollution. The long lifetime of coal-power plants would perpetuate these negative environmental and health impacts for decades,” said the legislators.

The Lamu Coal Power plant, the legislators warned, would increase unnecessary capacity and heighten African indebtedness to China and potentially undermine African partners’ long-term economic health.

By the time the project becomes operational, the Kenyan Government (GoK) will be obliged to pay $360million per year in fixed annual capacity repayments whether or not the electricity from the plant is dispatched.

“We understand the need for Kenya to increase electricity supply to its citizens. However, instead of financing projects that would produce profoundly negative environmental impacts AfDB should instead consider projects that tap into Kenya’s tremendous renewable and low cost resources,” they said.

Kenya has emerged as one of the top economies in Africa in clean and renewable energy with most of the country’s electricity currently coming from renewable sources namely; geothermal, solar and wind power.

Kenya’s current effective installed (grid connected) electricity capacity is 2,299 MW as at March 2015. Electricity supply is predominantly sourced from hydro and fossil fuel (thermal) sources.