African Team Leads Project Finance, Management for Ghana's 340-MW Power Plant

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Ghana's 340-megawatt (MW) Kpone Independent Power Plant (KIPP) project has achieved financial closure. The combined-cycle, multi-fuel thermal power station will be the largest independent power plant (IPP) to date in the country. It will be developed by Cenpower Generation Company Limited (Accra, Ghana), a special purpose vehicle.

Sited in the Tema Industrial Zone, close to the capital Accra, the $900 million project is scheduled to be brought online in 2017. It will supply 10% of Ghana's installed power generation and 20% of available thermal generation. With its combined-cycle gas turbine technology, it will be one of the country's most fuel-efficient thermal power stations and will become a critical base load component in meeting growing electricity demand.

Project finance consists of $650 million debt and $250 million in equity. The debt is being funded under export credit cover by a consortium of South African commercial banks and international development finance institutions (DFIs). Rand Merchant Bank (RMB) (Johannesburg, South Africa) acted as the global lead bank and mandated lead arranger for the commercial banking tranche. Other South African mandated lead arrangers were Nedbank (OTC:NDBY.PK) (Johannesburg) and Standard Bank (OTC:SBGOF) (Johannesburg). Nederlandse Financierings- Maatschappi voor Ontwikkelings Lann N.V. (FMO) (The Hague, Netherlands) acted as the mandated arranger for the DFI tranche.

Three leading investment groups will join the venture through the equity consortium and InfraCo (London, England), the original principal co-developer, will exit. New investors are Sumitomo Corporation (OTC:SSUMY) (Tokyo, Japan) and African Infrastructure Investment Fund 11 (Lagos, Nigeria) (via Mercury Power). The new stakeholder line up in the Cenpower set-up is: African Finance Corporation (Lagos, Nigeria) (31.85%); Cenpower Holdings (21%); Sumitomo (28%): Mercury Power (15%); and FMO (The Hague, Netherlands) (4.15%).

"This is a shining example of what can be achieved when Africa's public and private sectors combine in innovative and sustainable partnership to create the bankable energy infrastructure projects so critical to the continent's economic growth," said Oliver Andrews, AFC's executive director and chief investment officer, and Cenpower's project director. "Moreover, the fact that a near $1 billion transaction has been largely financed by African institutions reflects the growing capacity of indigenous leaders and equity investors to begin to address Africa's ongoing infrastructure deficit."

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