May 30, 2012 IFC, a member of the
World Bank Group, is investing €28.1 million in Thika Power Ltd.
to help develop an Independent Power Project (IPP) near Nairobi, Kenya.
Thika Power will sell all output to the national distributor, Kenya Power
and Lighting Company, increasing the supply of reliable electricity
in the country.
The 87 megawatt power plant will use heavy fuel oils (HFO), to help diversify
Kenya’s electricity away from hydropower. During times of drought, when
hydropower drops in supply, Kenya has had to turn to costly emergency power.
HFO power plants are a quicker and viable option to address the energy
deficit in Kenya, given the relatively long development period of other
sources like geothermal energy and coal.
The Thika project is a result of the Kenyan government’s tender of three
power plants in 2009, to encourage private sector participation in electricity
supply. Thika Power is a subsidiary of Melec PowerGen Inc., and an affiliate
of the Matelec Group of Companies from Lebanon. IFC is also investing in
another winning bidder, Gulf Power Ltd.
"With the massive growth in energy demand in Africa, Independent Power
Projects can add reliable and sustainable capacity to the power network,"
said Samer Nasr, Managing Director of Melec PowerGen Inc. “To successfully
implement an IPP, you need a partner with extensive knowledge and experience,
as well as a country that enjoys stability and has the required structures.
We believe KPLC and Kenya have all of these, and are leading the way in
the development of electrical infrastructure in sub-Saharan Africa."
Jean Philippe Prosper, IFC Director for East and Southern Africa said,
“Thika and the recent series of independent power projects in Kenya demonstrate
how the private sector can help the government meet growing demand for
electricity. The choice of heavy fuel oils will further diversify Kenya’s
energy sources, making power generation more stable.”
IFC, the Multilateral Investment Guarantee Agency (MIGA) and the International
Development Association (IDA) closely collaborated on the Thika Power project,
with IDA providing a Partial Risk Guarantee to facilitate the loan. Total
cost for the Thika power plant is estimated at €112.4 million. Alongside
IFC, the African Development Bank (AfDB) and Absa Capital will contribute
€28 million to the project.
The World Bank estimates that power shortages currently cost the Kenyan
economy 2 percent of GDP growth. Increasing power generation is at the
heart of both the Kenyan Government and IFC’s strategy for infrastructure
development. IFC will invest $1 billion in infrastructure projects
in Africa in fiscal year 2012, up from $200 million five years ago.
|About IFC |
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, providing
advisory services to businesses and governments, and mobilizing capital
in the international financial markets. In fiscal 2011, amid economic uncertainty
across the globe, we helped our clients create jobs, strengthen environmental
performance, and contribute to their local communities—all while driving
our investments to an all-time high of nearly $19 billion. For more information,