China-backed power station in Kenya blocked on environmental grounds

Lamu project blocked after court decides that the construction had been approved without a proper environmental impact assessment

Lamu, Kenya
Lamu, Kenya

A Kenyan court has blocked plans to construct the country's first-ever coal-fired power station, located near the coastal town of Lamu, which is a Unesco World Heritage Site.

The court decided that the National Environment Management Authority (Nema) had approved the construction of the plant without a proper environmental impact assessment.

The Lamu Coal Power Station is a planned 1,050 MW project, expected to cost US$2 billion. The project sponsor is the Amu Power Company, which has a power purchase agreement with electricity distributor Kenya Power.

In January 2014, the Government of Kenya invited bids from private developers to build, own, and operate the power station. In September 2014, the development rights were awarded to Amu Power Company, a project company featuring Kenyan investment firm Centum Investments and Kenyan power generation company Gulf Energy. Also involved are Sichuan Electric Power Design and Consulting Company Limited (SEDC), which is a subsidiary of Power Construction Corporation of China (PowerChina), and China Huadian Corporation Power Company.

Subsidiaries of PowerChina signed up to build the plant back in 2016.  

Centum said back in 2014 that project equity would be around US$500 million, with another US$1.5 billion funded through debt.

A preliminary financing agreement was subsequently signed, including a commitment from ICBC, though financial close has not yet been reached. US turbine manufacturer General Electric has also been lined up as an equity partner, in addition to providing the Ultra Super Critical clean coal technology. But the participation of these various parties is now in doubt. Standard Bank of South Africa has already withdrawn its support for the project. 

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