Kenya's National Land Commission (NLC) has started acquiring land for a coal-fired power plant in Lamu County on the Coast.

The NLC has announced through a Kenya Gazette notice that it will acquire 387.363 hectares to build the $2 billion plant and ancillary facilities, expected to inject 1,000MW of electricity into the national grid.

The project is part of Kenya’s ambitious plan to inject 5,000MW generated from coal, wind, solar, geothermal and hydro sources into the national grid by next year.

The plant will be built and operated by Amu Power Company, a consortium of Gulf Energy Ltd, Centum Investment Group, China Huadian, Sichuan No 3 Power Construction Company and Sichuan Electric Power Design and Consulting Company. Construction work is expected to take 21 months.

The facility will sell electricity to Kenya Power at 7.52 US cents per kilowatt-hour.

The Lamu coal plant will be funded using a mix of equity and debt. Industrial Commercial Bank of China will provide 60 per cent debt financing of $1.2 billion, local banks will provide 15 per cent or $300 million, while shareholders will provide $500 million equity.

Construction was expected to start on September 30, last year but was delayed to enable NLC to complete the land acquisition exercise. Gulf Energy was in September 2014 awarded the tender to build the generating facility.

A legal suit challenging the award was withdrawn in court in June last year by the losing bidder Hebei Construction Investment Group of China, with Kenyan joint venture partner Liketh Investments.

A coalition of civil societies in November last year objected NLC’s intention to allocate land in Kwasasi area, arguing that the transfer would displace local communities.

Environmentalists have also raised concerns over the plant’s carbon emissions and toxic coal ash which contain pollutants such as lead and arsenic that can cause respiratory ailments and water poisoning if not handled properly.

Amu said that it had conducted numerous studies, whose details and recommendations would be known, “once the impact assessment report is publicly available.”