Banking group Standard Bank, its Kenya-based subsidairy Stanbic Bank and independent power producer Aeolus Kenya have partnered in a $150-million deal to develop a 60.8 MW wind power project in the Kinangop Plateau region, in central Kenya.
The Kenyan government will be the buyer of power from the Kinangop Wind Park, which is scheduled to come on line in mid-2015.
“Aeolus Kenya has already signed a power purchase agreement with State utility Kenya Power,” said Standard Bank East Africa head of debt solutions and infrastructure finance Kwame Parker.
The Kinangop Wind Park, which would boost Kenya’s 1 672 MW national power grid and power 150 000 Kenyan households, was the first in a series of strategic projects under US President Barack Obama’s Power Africa initiative.
The initiative planned to roll out 1 GW of wind, geothermal and gas fired power projects in the East African region.
This flagship wind power project in Kenya was expected to be the largest wind power generation project – outside South Africa – to be built in sub-Saharan Africa to date.
Standard Bank, under its first deal in the renewable-energy sector in East Africa, is the lead arranger and would underwrite $90-million of the debt, while Norway’s Norfund and a large Africa-focused international infrastructure investor would provide $60-million in equity.
“It’s been a complex deal, but we are delighted that all our efforts have yielded a positive outcome for Kenya and its ongoing efforts to improve energy security,” Parker added.
The transaction had “opened the way” for similar deals in the region, as investors were increasingly seeking renewable sources to boost power supply.
“On the back of the success of this deal, Standard Bank has signed mandates to develop other wind farms in Kenya, some of which are going to be larger in size,” he said.
The financial close of the wind project was expected to be completed within the next three weeks.