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Lamu Power Project

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This article is part of the Coal Issues portal on SourceWatch, a project of CoalSwarm and the Center for Media and Democracy. See here for help on adding material to CoalSwarm.

This article is part of the CoalSwarm coverage of Africa and coal.
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Coal-fired power stations in Africa

Coal mines in Africa

The Lamu Power Project is a proposed 1,050-megawatt (MW) coal-fired power station in Lamu County, Kenya.

The project would include coal-handling facilities at the proposed Lamu Port.

Location

The map and satellite photo below shows the proposed construction location for the plant in Manda Bay. The power station would be located on 975 acres in the Kwasasi area, about 21 kilometers north of the town of Lamu in Lamu County, along Kenya's Indian Ocean coast.[1] This is approximately 250 kilometers, by air, north-east of Mombasa.[2] This is approximately 250 km, by air, north-east of Mombasa. The driving distance is approximately 300 km.[3]

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Background

In 2013 the Kenyan government released an "Expression of Interest" meant to target investors for the proposed Lamu Power Project. The plant would rely on imported coal from South Africa and Zimbabwe. The Kenyan government also stated that it was willing to move the project from Lamu County to Kitui County where large deposits of coal were recently discovered.[4]

In September 2014 it was reported that the plant would be constructed in Lamu County by a company known as Amu Power, a consortium of Kenyan companies Centum Investment Group and Gulf Energy Ltd., as well as Chinese companies China Huadian, Sichuan Electric Power Design and Consulting Company, and Sichuan No 3 Power Construction Company.[5] According to Amu Power, the plant will be 1,050 MW, and include coal-handling facilities at the proposed Lamu Port, including a jetty and associated infrastructure.[6] The proposed power plant will initially produce power using coal sourced from South Africa and later on switch to local coal mined from Kitui County's Mui Basin.[7]

Two of the losing bidders challenged the award in court. An arbitration tribunal, however, upheld the award in January 2015.[8][9] Construction was pushed to 2015 following the disputes,[7] and the planned commencement date of January 2016 will likely be pushed back.[10] Members of the Lamu County Assembly said they want 30 per cent of the profits gained from the coal power plant project to remain in the county to benefit the local population, rather than going to the national government.[11]

According to the Amu Power website, the project is under Environmental & Social Impact Assessment (ESIA), expected to be completed in March 2015, after which it will be uploaded for public comment.[12] In July 2015 it was reported that the Lamu county government had endorsed the Amu coal plant, as long as all ESIA concerns were addressed. County representatives said they expected compensation packages for people affected by the project, and said priority in jobs accruing from the venture should be given to Lamu people.[13]

Construction of the plant is expected to start on September 30, 2015, and take 21 months to produce electricity.[14] However, on September 14, 2015, it was reported that construction had been delayed as Amu Power Company needed the Kenya National Land Commission (NLC) to finish a resettlement plan for the site before the company could submit an environmental impact report, which needs to be approved before construction can begin.[15]

The environment project report was submitted in September 2015, and states the plant would use supercritical technology.[16]

December 6, 2016: Silent protest march in Lamu Old Town

In March 2016 it was reported the environmental and social impact assessment (ESIA) for the project was still underway.[17] In May 2016 Kenya's National Land Commission (NLC) said it was acquiring 387.363 hectares to build the US$2 billion plant.[18] Amu Power has signed a power purchase agreement with Kenya Power to sell electricity generated at the plant at a cost of US7.52c/kWh.[19]

In August 2016, the Lamu County Assembly rejected an environmental and social impact assessment report by investors on the plant. The assembly wants the project owners to come up with a resettlement plan for residents who will lose their land to the project. Over 975 acres had been set aside for the project, with 600 land owners expected to be affected.[20]

However, it was reported on September 7, 2016, the National Environmental Management Authority (Nema) issued a license to Amu Power allowing the company to start building the coal power plant.[21]

An objection to the plant's approval by the group Lamu Natural Justice was heard by the Energy Regulatory Commission (ERC) in December 2016. In February 2017 the ERC over-rode the objection and approved the construction of the plant.[22] According to the NGO Save Lamu, the ERC decision does not mean a license to build the project has been granted; rather, ERC are still deliberating and a decision has yet to be made on the granting of the electricity generation license.[23]

In July 2017 Save Lamu petitioned the Environment & Land Court of Kenya to determine whether or not the Energy Regulatory Commission has granted an Electricity Generation Licence to Amu Power to build the proposed 1,050 MW coal plant and to make full disclosure of the Power Purchase Agreement (PPA) into which it entered.[24]

In May 2018 it was reported that General Electric (GE) was set to acquire a stake in Amu Power in exchange for supplying ultra-supercritical units and pollution controls for the Lamu project.[25]

In June 2018 it was reported that the Kenya Energy Regulatory Commission (ERC) instructed developers of the proposed 1,050 MW coal plant to scale it down, reportedly to avoid excess electricity that would force consumers to pay for idle plants. The energy regulator directed cuts in the phased capacity from three phases of 350 megawatts to three phases of 150-200 MW.[26] However, one day later the Kenya ERC issued a press release on its Twitter account saying there had been no change in the proposed capacity.[27]

In August 2018, 56 institutional and individual investors with US$713 billion (Sh71.3 trillion) in assets under management asked US firm General Electric to withdraw an earlier decision to invest in the plant. GE was to purchase a Sh40 billion stake in Amu Power as well as manage the plant and provide new steam turbines and boilers.[28]

In October 2018 the High Court in Nairobi reinstated all automatic stay orders issued for projects challenged at the National Environmental Tribunal (NET). The ruling effectively restored stop orders issued, including the Lamu plant. The case was filed by activist Okiya Omtatah and Katiba Institute.[28]

Ownership

Amu Power Company is a consortium of Gulf Energy, Centum Investment Group, China Huadian, Sichuan No 3 Power Construction Company and Sichuan Electric Power Design and Consulting Company. The special purpose vehicle will develop, own and operate the station for 25 years as part of the Lamu Port and Lamu-Southern Sudan-Ethiopia Transport Corridor, which will include the proposed Lamu Port at Manda Bay, connecting railroads, oil pipelines, and a refinery.[29]

Development

In July 2016 it was reported that Amu had contracted Chinese firm, Power Construction Corporation (PowerChina), to build the plant. PowerChina said it plans to hire 1,400 Chinese workers, constituting 40 per cent of the plant's development workforce.[30]

Financing

In February 2015 Amu Power received US$1.2 billion (Sh1,013.2 billion) financing from the Industrial Commercial Bank of China for the project, and was negotiating with local banks for a US$300 million loan. The project is valued at US$2 billion and will be financed through debt (US$1.5 billion) and shareholder equity ($500 million).[14]

In July 2016, Standard Bank of South Africa and Industrial and Commercial Bank of China (ICBC) agreed to jointly fund the US$300 million that was needed to close the deal. ICBC has a 20% stake in Standard Bank.[31] However on October 16 2017 Standard Bank said it will not fund the proposed coal-power plant in Lamu.[24]

In August 2017 it was reported that the African Development Bank (AfDB) was considering funding amounting to US$100 million as well as guarantees of a similar amount for the construction of the power plant.[24]

Opposition

- November 29, 2015: Lamu County Rep. Shakila Abdalla (right), flanked by the County's Maendeleo Ya Wanawake Organisation chair Hindu Salim (2nd right), at a protest against the Lamu plant. (PHOTO: MAARUFU MOHAMED/ STANDARD)

In 2015 local residents started a petition calling on Lamu Governor Issa Timamy to stop the coal project. According to the Sierra Club, the proposed Lamu plant does not employ the best available technology to limit pollution, and it will begin operation without Selective Catalytic Reduction (SCR) to reduce nitrogen oxides. The proposal is also home to the World Heritage listed Lamu Old Town.[32]

A 2015 report on the area from Unesco’s World Heritage Committee stated that “[t]here can be no doubt that a project of this scale and scope, in an area as remote and protected as Lamu, cannot help but have profound negative impacts on the heritage." Both Save Lamu and another group that are campaigning on the issue, Muslims for Human Rights (Muhuri), say they will take their concerns to court if the project is permitted.[33]

In 2016 the group Save Lamu presented the governor of Lamu county, Issa Timamy, with a signed petition to stop the project. Both Save Lamu and another group that are campaigning on the issue, Muslims for Human Rights (Muhuri), fear the National Environmental Management Authority might not be fair with the project ESIA. “We sent our comments in November last year and to date we are yet to get a reply,” said Khadija Shekuwe, the research officer at Save Lamu.[34]

On May 12, 2017, more than 10 local civil society groups held a peaceful protest against the project, marching silently around Lamu Old Town with placards and posters.[35]

Project Details

  • Sponsor: Amu Power Company
  • Parent company: Centum Investment Group, Gulf Energy Ltd., China Huadian, Sichuan Electric Power Design and Consulting Company, and Sichuan No 3 Power Construction Company
  • Location: Manda Bay, Lamu County, Kenya
  • Coordinates: -2.291111, 40.855556 (exact)
  • Status: Pre-permit development (awaiting generation license)
  • Gross Capacity: 1,050 MW (Units 1-3: 350 MW) (may be scaled down to 450-600 MW total)[26]
  • Type: Ultra-supercritical
  • Start date:
  • Coal Type:
  • Coal Source: initially South Africa, later domestic (Kitui County's Mui Basin)
  • Source of financing: Industrial Commercial Bank of China
  • Permits and applications: ESIA, Amu Power, July 2016

Articles and resources

References

  1. Njoroge, Kiarie (25 July 2016). 1,400 Chinese workers to build Sh200bn Lamu coal plant. Retrieved on 25 July 2016.
  2. Globefeed.com) (28 January 2016). Distance between Mombasa, Kenya and Lamu, Kenya. Globefeed.com. Retrieved on 28 January 2016.
  3. Globefeed.com) (28 January 2016). Distance between Mombasa, Kenya and Lamu, Kenya. Globefeed.com. Retrieved on 28 January 2016.
  4. "Initial plans to set up coal plant in Lamu reconsidered in favour of Kitui" Standard Digital, November 10, 2013.
  5. "Kenyan Chinese Consortium to Build 1000 MW Coal Plant," Power Engineering, September 3, 2014
  6. "About Amu Power," Amu Power website, accessed July 2015
  7. 7.0 7.1 "Lamu Coal Power Plant Project," Citizen News, Jan 13, 2015
  8. Standard Reporter, and Reuters (15 January 2015). Tribunal Backs Centum Consortium's KSh170 Billion Coal Power Plant Tender Win. Retrieved on 24 January 2015.
  9. Wasuna, Brian (14 January 2015). Centum Wins KSh164 Billion Coal Power Plant Tender Case. Retrieved on 24 January 2015.
  10. "Lamu coal power project risks further delays," The Star, Feb 6, 2015
  11. "Lamu wants share of coal plant profits," KenyaMOJA.com, July 12, 2015
  12. "ESIA," Amu Power website, accessed July 2015
  13. Philip Mwakio, "Lamu County Assembly approves proposed coal-fired Amu Power plant in Manda Bay," July 10, 2015
  14. 14.0 14.1 "Lamu nod boosts Centum’s 1,000MW coal power plant," Business Daily, July 9 2015
  15. "Kenya coal power plant construction delayed," Reuters, Sep 14, 2015
  16. "Environment Project Report Study for the Proposed 1050MW Coal Power Plant, Lamu County, Kenya," Report Prepared for Amu Power Company Limited Report No. KT/4085/EPR/00, September 2015
  17. "Locals oppose plans to build first coal-fired power plant in Kenya," Guardian, March 3, 2016
  18. "Kenya now securing land for Lamu coal plant," The East African, May 14, 2016
  19. "Banks back 1 000 MW coal fired power project in Kenya," Engineering News, Aug 5, 2016
  20. "Lamu County puts coal-fired power plant on hold," Daily Nation, Aug 10, 2016
  21. "Kirubi-backed firm gets Nema nod to build Lamu coal power plant," Money and Markets, Sep 2016
  22. "Coal-fired plant gets greenlight from ERC," Daily Nation, Feb 27, 2017
  23. "Energy Regulatory Commission has Not Issued a License for the Lamu Coal Plant," Save Lamu, March 30, 2017
  24. 24.0 24.1 24.2 "Lamu coal power project Kenya," Bankwatch, updated Sep 18, 2017
  25. "GE to acquire stake in Amu Power after clean coal technology deal," Capital Business, May 16, 2018
  26. 26.0 26.1 "Kenya plans to cut Lamu coal power plant capacity by half," Daily Nation, June 5, 2018
  27. "Amu Coal Power generation Plant Press Release, Kenya Energy Regulatory Commission, June 6, 2018
  28. 28.0 28.1 "Lamu Coal Plant Stop Order Reinstated by High Court in Nairobi," Kenyans, 3 October 2018
  29. Otuki, Neville (8 June 2015). Chinese Firm Signs KSh96 Billion Contract for Lamu Coal-Fired Electricity Plant. Retrieved on 22 June 2015.
  30. "Kenya: 1,400 Chinese Workers to Build Sh200 Billion Lamu Coal Plant," Daily Nation, July 26, 2016
  31. Juma, Victor (17 July 2016). Standard Bank to finance Centum’s Sh200 billion coal plant. Retrieved on 18 July 2016.
  32. Nicole Ghio, "In Kenya, Proposed Coal-Fired Power Plant Threatens World Heritage Site," HuffPo, Aug 28, 2015
  33. "Locals oppose plans to build first coal-fired power plant in Kenya," Guardian, March 3, 2016
  34. "Locals oppose plans to build first coal-fired power plant in Kenya," Guardian, March 3, 2016
  35. Kalume Kazungu, "Activists demonstrate against Centum's coal project," Business Daily, May 12, 2017

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External resources

External articles

Wikipedia also has an article on Lamu Power Project. This article may use content from the Wikipedia article under the terms of the GFDL.