Washington/Nairobi, July 6, 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
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 use.
“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
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, visit www.ifc.org.