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, in concluding all material contracts and delivering a bankable project, is the majority owner of project company Kinangop Wind Park (KWP), while Norfund holds the remaining interest.

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

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

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

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

African Infrastructure Investment Managers (AIIM) regional director for East Africa Kameel Virjee says 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 infra-structure is vital for the economic growth and development of the African continent and, as the continent becomes an increasingly attrac- tive investment destination, the role of infra-structure in the development of the continent has become more apparent,” he says.

AIIF2 further aims to draw value from the growing number of African infrastructure investment opportunities and has 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, has contributed to poverty reduction and economic develop-ment through investments in profitable busi- nesses and transfer of knowledge and technology.

Its main investment sector is 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.