Standard Bank signs $150m power project deal in Kenya

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Standard Bank Group, Africa’s largest bank by assets, in conjunction with its subsidiary Stanbic Bank in Kenya, has signed a deal with Aeolus Kenya, to build a $150-million wind power plant in Kenya.

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Aeolus Kenya (AKL) is an independent power producer and a member of the Power Africa Initiative led by the United States President Barack Obama, which is developing 1GW of wind, geothermal and gas fired power projects in the East African region.

AKL’s landmark project, the 60.8mw Kinangop Wind Park, is its first in a strategic pipeline of projects, while the plant will be the largest wind power generation farm in sub-Saharan Africa to date, outside South Africa.

Richard Herbert, director/CEO, and Jenny Fletcher, managing director, share in their joint statement that “the development of this ground breaking large scale wind park has been a challenging and rewarding process and we look forward to continuing our strong relationships with the Kenyan government, and our local and international partners in realising Kenya’s Vision 2030 goals.”

Kinangop Wind Park will add a further 60mw to Kenya’s 1,672mw national power grid, while the 60mw wind power plant will provide electricity to 150,000 Kenyan households.

According to Kwame Parker, Standard Bank’s East Africa head of debt solutions and infrastructure finance, the transaction will be fully funded through a combination of debt and equity.

Standard Bank is the lead arranger and will underwrite $90 million of the debt, while Norway’s Norfund and a large Africa-focused international infrastructure investor will provide $60 million in equity. Financial close is expected in the next three weeks, and syndication of the debt is now underway.

“With the rising demand for electricity in Kenya, this project will go a long way in providing cost-effective power to the economy. It is a good example of how to successfully bring private players into the renewable energy sector and serves as a good vote of investor confidence in the Kenyan economy,” he saiy.

Kenya, East Africa’s largest economy, relies heavily on hydro-electric dams for power, which is often challenged in times of reoccurring drought.

“The project is designed to provide a clean source of electricity to Kenya. It will not only contribute to the social and economic development of Kenya, but will also significantly help ease the energy supply deficit that the country is grappling with. It provides a perfect opportunity for Kenya to increase the production of clean energy and reduce heavy reliance on other sources of power,” he said.

The plant is expected to come on line in mid-2015. The Kenyan government will be the main buyer of the power produced. Aeolus Kenya has already signed a power purchase agreement with state utility Kenya Power, according to Parker.

“What makes this deal significant is that it is a collaboration of players in various sectors combining their skills in order to meet Kenya’s growing demand for electricity. It’s been a complex deal, but we are delighted that all our efforts have yielded a positive outcome for Kenya and its ongoing efforts to improve energy security. Standard Bank’s on-the-ground expertise and its global support network have been able to provide the necessary skills and capital to support a project of this nature and magnitude.”

Babatunde Akinsola
Babatunde Akinsolahttps://naija247news.com
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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