Kenyans plan a 300 MW wind and solar power project

NAIROBI (Reuters) - A group of Kenyan investors want to start a 300 megawatts wind and solar power project in the north of the country next year, the head of their enterprise said on Thursday.

East Africa's biggest economy is seeking to increase electricity generation from alternative sources like wind and solar to meet demand that is expected to rise to 9,000 MW by 2030 from this year's 1,050 MW.

"The choice of the project was informed by blackouts, low penetration rate of electricity and instability of the power that we have. We are trying to secure land for the whole project," Michael Nderitu told Reuters.

Energy sector analysts say the private sector is the best and fastest solution to bridge Africa's power deficit.

Kenya energy minister said last week the country will not meet its target of boosting connections to the national grid in rural areas to 20 percent by the end of next year, due to lack of funds.

Nderitu, whose start-up is called Giston Energy, said capital requirements for "green" energy projects were substantial but they were cheaper to run in the long term due to low maintenance costs.

He said the project would require $1 billion and the group is exploring various financing models. The funding plan would be firmed up once an ongoing feasibility study was completed.

Giston engaged British energy consultant Garrad Hassan to carry out a pre-feasibility studies, Nderitu said. They are now talking to a Belgian firm to advise them on the carbon credits side of the project.

He said the biggest challenge for a start-up in Kenya's green energy sector was lack of experience and expertise.

Kenya mainly relies on hydropower for its electricity needs but it has recently formed a geothermal firm to scale up generation from its geothermal resources in the Rift Valley.

It has also formed a second transmission and distribution firm that is expected to increase generation projects because investors will have a channel through which to sell their electricity.

Another Kenyan firm, Lake Turkana Wind Power, is installing another 300 MW wind farm, some 600 km from Nairobi.

(Editing by William Hardy)