Washington/Nairobi, July 8, 2012--IFC,
a member of the World Bank Group, is providing a $50 million loan to Kenya
Power Lighting Company (Kenya Power) to help the national power distributor
expand its network to reach over half a million new households by 2014
while reducing losses and increasing the supply of reliable electricity.
Kenya Power’s expansion responds to greater
demand for electricity as Kenya’s economy eyes middle-income status. The
Kenyan government announced a target of 40% household access to power by
2020, while reducing the gap between urban and rural areas. During the
past three years, the company has been injecting capital to continue extending
the power grid as it accelerates its connectivity rate. Kenya Power connected
over 300,000 new customers in the last financial year alone.
“IFC’s decision to loan $50 million demonstrates
the confidence that the World Bank and its sister institutions have in
corporate administration at Kenya Power and the viability of its business,"
said Joseph Njoroge, Managing Director and CEO of Kenya Power. “The
funds will fill a financing gap as Kenya Power endeavors to transform the
distribution network to improve quality, stability and reliability of power
supply to a fast growing economy.”
The $50 million is the beginning of long-term
cooperation between IFC and Kenya Power, possibly followed by further tranches
to help the company implement 42 power projects in Nairobi and its environs.
“Power projects are by nature capital intensive,
and the IFC loan therefore brings in much needed financial support in efforts
to extend the national grid, improve quality of power supply and stabilize
voltages to cope with additional demand, Njoroge added.
The expansion will also bear fruit for Kenya’s
climate change agenda. Alongside the investment, IFC’s resource
efficiency team will provide advisory services to Kenya Power on how to
reduce power losses. Even a 1 percent drop in power loss leads to massive
energy savings, cutting Kenya’s greenhouse gas emissions by 55,000 tons
per year. IFC and Kenya Power are working together to develop measures
that will enable the company to save energy through more efficient energy
“More stable power supply will allow business
growth and improve living standards in Kenya,” said Jean Philippe Prosper,
IFC Director for East and Southern Africa. “The IFC
loan builds on a long-term partnership between the World Bank and Kenya
Power over the past 10 years. IFC seeks
to invest in companies such as Kenya Power, which will further develop
the power sector in Kenya and the region; reduce damage to the environment
and fuel economic growth and development of the East Africa power pool.”
Increasing access to power is at the heart
of IFC’s strategy for infrastructure development in sub-Saharan Africa.
IFC invested $1 billion in infrastructure projects in Africa in fiscal
year 2012, up from $200 million five years ago.
IFC, a member of the World Bank Group, is
the largest global development institution focused exclusively on the private
sector. We help developing countries achieve sustainable growth by financing
investment, mobilizing capital in international financial markets, and
providing advisory services to businesses and governments. In FY12, our
investments reached an all-time high of more than $20 billion, leveraging
the power of the private sector to create jobs, spark innovation, and tackle
the world’s most pressing development challenges. For more information,