The joint venture between Macquarie Group and Old Mutual Investment Group has cancelled its $144-million wind power project due to the opposition from local landowners and farmers.
Kinangop's project in Nyandarua County in central Kenya was due to come online by mid-2015, but progress was hobbled by disputes with residents over compensation for land.
"The impact of the initial civil commotion has not been resolved, while further incidents of civil commotion have occurred, creating an unsafe environment for the team to implement the project," said James Wakaba, the CEO of the project.
Wakaba also stated that due to the consequent material delay, project funds have been depleted and the project can no longer be completed by the shareholders. Mostly, what triggered the investors to pullout was due to the events of serious security.
The Kinangop Wind Power Park was to provide 60.8 megawatts of wind electricity to the national grid at a cost of Sh15 billion, which was expected to boost consumption of renewable energy and consequently translate into cheap electricity.
The project had aimed to provide electricity to an estimated 150,000 Kenyan homes by 2018. It includes the other wind power projects in Lake Turkana Wind Power site in the north of the country.
Its failure is a setback for the East African nation's drive to increase its power generation capacity by 5,000 MW in the five years to end-2017.
It was supposed to be implemented by Aelous Kenya Limited, a locally operating firm specializing in development of energy and infrastructure projects.
Kinangop Wind Park blamed political leaders for inciting locals against offering way leaves for construction of the power plant, putting the projects on the verge of collapse.
The tussle saw ten residents sue the project proprietors, the National Environment Management Authority, the ministry of energy, county governments of Nakuru and Nyandarua, the Attorney General and the Inspector-General of Police.
They alleged that the land for the project had been fraudulently acquired and that the undertaking did not meet international standards hence, posing a health hazard to the community.
The Kinangop Wind Park was conceptualized in 2004, and was to see the construction of 38 wind turbines on the Kinangop plateau. Each would have the capacity to generate 1.6 MW and an expected lifespan of 20 years.
In 2011, American conglomerate General Electric won the bid to supply the 38 turbines and provide maintenance for 10 years through a service agreement with the Kinangop Wind Park valued at $58 million (Sh5.9 billion at current exchange rates).
