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CfC Stanbic Bank Kenya in Sh13b deal to build wind power project

CfC Stanbic Bank has signed a deal with independent power producer Aeolus Kenya, to build the Sh12.9 billion ($150 million) Kinangop Wind Park in Kenya.
Aeolus Kenya (AKL) is a member of the Power Africa initiative led by the United States President Barack Obama which is developing 1 gigawatt of wind, geothermal and gas fired power projects in the East African region.

Richard Herbert, chief executive and director and Jenny Fletcher managing director share in their joint statement, "The development of this large scale wind park has been a challenging and rewarding process and we look forward to continuing our strong relationships with the Kenyan Government."

Kinangop Wind Park will add a further 60 MW to Kenya's 1,672 MW national power grid.
According to Kwame Parker, CfC Stanbic 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, CfC Stanbic Bank's parent bank, is the lead arranger and will underwrite Sh7.74 billion ($90 million) of the debt, while Norway's Norfund and a large Africa-focused international infrastructure investor will provide Sh5.16 billion ($60million) 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," Parker said.

"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," he said.

He said this provides a perfect opportunity for Kenya to increase the production of clean energy and reduce heavy reliance on other sources of powerThe 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 Mr Parker.

The wind project has also been registered under the United Nations' Clean Development Mechanism.


Additional information: CDM registry
News date: 02/10/2013

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