Kipeto Energy Ltd ("Kipeto") announced it has reached financial close following the acquisition by leading growth markets investor Actis of the respective equity interests of IFC, a member of the World Bank Group and African Infrastructure Investment Managers' ("AIIM"), a member of Old Mutual Alternative Investments.
The project is now funded by equity from Actis (88%) and Kenyan company Craftskills Wind Energy International (12%) alongside senior debt from the Overseas Private Investment Corporation ("OPIC"), the US Government's development finance institution.
Once operational, Kipeto, located in Kajiado county, as the country's second largest wind farm will supply 100MW of clean energy to the national grid as a significant contribution to Kenya's Vision 2030 and Big Four Agenda.
The Kipeto project was originally conceived by Craftskills Wind Energy International, with support from General Electric ("GE"). AIIM and IFC InfraVentures co-developed the project with Craftskills from 2014 until early 2018, executing a 20-year Power Purchase Agreement (PPA) with Kenya Power and Lighting in 2016.
The project is now preparing for the construction of 60 GE 1.7-103 wind turbines and a 17km (220KV) transmission line to carry the power to Isinya substation in Kajiado County, providing power to the equivalent of approximately 40,000 homes in the region.
It is anticipated that more than 400 job opportunities will be created during the construction phase of the project and an additional 70 permanent jobs during the operational phase.
Actis, IFC, AIIM and Craftskills worked with specialist consultants during both the planning and development stages of the project to undertake a series of environmental assessments and impact studies. With support from USAID Power Africa, Kipeto has developed and initiated a Biodiversity Action Plan, which is designed around the international best practice outlined in the IFC environmental performance standards.
Dr. Kenneth Namunje, Director of Craftskills and Chairman and Director of Kipeto Energy Limited, highlighted the role of the local community: "We would like to thank the local community for their support of this project from the outset. We have leased and secured more than 60 plots within the project area for the wind turbine footprint and the transmission line through voluntary participation of land owners, which is a first for any project of this kind in Kenya, and we're constructing new houses for the families outside the project's 500m buffer zone, so local buy-in has been a vital component.''
Jumoke Jagun-Dokunmu, IFC Regional Director for Eastern Africa, said: "We are delighted to have achieved what we set out to do in co-developing the project and mobilizing development-stage financing for the project's implementation. We have a long history with Actis which gives us complete confidence in their ability to guide the company through its next stage of growth and complete the project to the high standards established during the development phase of the project."
Jurie Swart, CEO AIIM, commented: "AIIM is proud to have laid the ground work for the Kipeto Wind Energy Project, which will be the second largest wind power project in Kenya, and to have partnered successfully with local developers and stakeholders in making an important contribution to the country's sustainable economic development."
Lisa Pinsley, Director in the energy business at Actis, said: "We thank IFC and AIIM for such a well-managed period of transition. We are excited about taking the Kipeto project forward and we are committed to maintaining the highest level of standards drawing on our 70 years of investing responsibly in Africa. The project will not only contribute significantly to the Government's Vision 2030 agenda but will also have a positive impact on the local community through the creation of jobs and provision of over 80 houses."
Overseas Private Investment Corporation ("OPIC"), the US Government's development finance institution, is the principal lender to the project. The African Trade Insurance Agency ("ATI") will provide a 10-year standby revolving and on-demand insurance cover to protect the project against the risk of payment delays by the national off-taker. The wind turbines will be provided by GE Renewable Energy who will also provide operations and maintenance services for the project, while China Machinery Engineering Corporation ("CMEC") will be providing Engineering, Procurement and Construction ("EPC") services. In addition, Haidco are construction equipment suppliers for the Project, as well as building partners for the new community housing.
Kipeto Energy | http://www.kipetoenergy.co.ke