Clean energy company AEP Energy Africa has entered into a purchase agreement with First Independent Power, in Kenya, and Global Power Generation Sociedad Anónima to acquire 100% of East African company IberAfrica Power for $61-million, or R835-million.
IberAfrica owns and operates the 103 MW diesel-fired Nairobi South Power Plant (NSPP), which comprises two units with power generating capacities of 51 MW and 52 MW respectively.
IberAfrica has an existing power purchase agreement with Kenya Power & Lighting Company. It is the sole utility licensee to buy and distribute grid-connected electricity in Kenya.
The purchase agreement bodes well for AEP’s vision to strategically increase access to, and use of, a variety of clean energy products by African countries, their industries and their citizens.
The company intends to achieve this by owning and operating a network of energy assets such as power plants, fuel terminals and distribution logistics which produce, transport, store or handle for profit, under long-term supply contracts, products such as electricity, steam, biomass and natural gas.
The transaction, if implemented, presents an opportunity for AEP to convert the diesel-fired engines at NSPP1 and NSPP2 to run on liquefied natural gas (LNG), thereby enhancing the long-term return on investment, while taking a first step towards entering the LNG value chain.