Last Updated 13 years ago by Kenya Engineer
The month of October looks promising to Kenya’s Power sector with a 83 megawatt (MW) thermal power plant set to be built in the Country. CfC Stanbic Bank and the Industrial and Commercial Bank of China (ICBC) will finance the $108 million project, said CFC bank on Wednesday.
The heavy fuel oil plant will be built by Triumph Kenya, a private power company. ICBC will provide $80 million of the debt financing while CfC Stanbic will provide the rest said the latter in a statement.
Standard Bank, CfC’s parent company, said the World Bank’s Multilateral Investment Guarantee Agency (MIGA) would provide insurance of $102.5 million, in part to cover a breach of contract should the distributor, Kenya Power, fail to adhere to its 20-year power purchase agreement with Triumph Kenya.
With regards to the agreement, Kenya Power is expected to purchase power from the plant, which will be a crucial supplier to the utility during times of drought when the country’s hydroelectric generating capacity becomes constrained.
“The highlight of this transaction is that it marks the first time that a Chinese commercial bank has used MIGA cover for a non-recourse transaction,” said Kwame Parker, East Africa Head of Debt Solutions & Infrastructure Finance at CfC Stanbic Bank. “It’s also likely the first time a Chinese financial institution is directly lending to a project company for a transaction in Sub-Saharan Africa that is not related to resource extraction, with no explicit sovereign guarantee,” he added.
Earlier this month, CfC Stanbic Bank said it was also providing $90 million in debt for a US$150 million wind power plant in the country.
-
Product on sale
AWEBook Volume 2Original price was: KShs 3,500.00.KShs 3,000.00Current price is: KShs 3,000.00.
