The African Infrastructure Investment Fund 2 (AIIF2) and the Norwegian investment fund for developing countries Norfund have achieved financial close of the $150-million 60.8 MW Kinangop greenfield wind project, in Nairobi, Kenya.

Kinangop is the first independent large-scale wind farm in East Africa and a landmark transaction for both the African power sector and the project finance market.

AIIF2, which became involved in the project in 2012 to assist the developer Aeolus Kenya to conclude all material contracts and deliver a bankable project, is the majority owner of the project company Kinangop Wind Park (KWP), while Norfund held the remaining interest.

The mandated lead arranger for the project debt was CFC Stanbic, the Kenyan presence of Standard Bank South Africa, which had also underwritten the full debt requirements of the project.

The project, set to be built by Spanish construction company Iberdrola Ingenieria y Construccion, would entail the installation of 38 General Electric 1.6 MW wind turbines.

Once completed, KWP would sell electricity to Kenya’s electricity distribution company, the Kenya Power and Lighting Company, under a long-term power purchase agreement.

Kinangop was expected to start feeding electricity into the grid in the first quarter of 2015, while full commercial operation was expected to start in July 2015.

African Infrastructure Investment Managers (AIIM) regional director for East Africa Kameel Virjee said AIIF2 reached final close in September 2011 with total commitments of $500-million.

AIIM is a joint venture between Macquarie Group and Old Mutual Investment Group and is an adviser to AIIF2.

“AIIF2 is designed to invest equity in a diversified infrastructure and infrastructure-related assets portfolio, primarily within sub-Saharan Africa.

“The fund recognises that effective infrastructure is vital for economic growth and development of the African continent and, as the continent becomes an increasingly attractive investment destination, the role of infrastructure in the development of the continent has become more apparent,” he said in a statement.

AIIF2 further aimed to draw value from the growing number of African infrastructure investment opportunities and had made several strategic investments in the energy and transport sectors.

Meanwhile, Norfund, which was owned by the Norwegian Ministry of Foreign Affairs and served as an instrument in Norwegian development assistance policy, contributed to poverty reduction and economic development through investments in profitable businesses and transfer of knowledge and technology.

Its main investment sector was renewable energy, including hydro, wind and solar power projects, with its current investment portfolio totalling $1.5-billion invested in 110 different projects across Eastern and Southern Africa, Central America and South East Asia.