The African Infrastructure Investment Fund 2 ("AIIF2") and Norfund, the Norwegian Investment Fund for Developing Countries, achieved financial close of the 60.8MW Kinangop Wind Park project in Kenya.
Kinangop Wind Park 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.
The $150 million project comprises the construction, financing, operation and maintenance of a 60.8MW greenfield wind park located in the Kinangop region, about 60km northwest of Nairobi.
AIIF2, which is advised by African Infrastructure Investment Managers (AIIM), a joint venture between the Macquarie Group and the Old Mutual Investment Group, is a majority owner in the project company, Kinangop Wind Park Limited ("KWP"), while Norfund owns the remaining shares.
The two investors teamed up with project developers, Aeolus Kenya Limited, in 2012 to support them in bringing the project to financial close. Through their investment in KWP, AIIF2 and Norfund will promote sustainable and environmentally friendly electricity generation in Kenya.
The mandated lead for the arrangement of the project debt is CFC Stanbic, the Kenyan presence of Standard Bank of South Africa, which has also underwritten the full debt requirements of the Project.
The Project will be built by Spanish construction company, Iberdrola Ingenieria y Construccion, which will install 38 General Electric 1.6MW wind turbines. KWP will sell electricity to the Kenya Power and Lighting Company, Kenya's electricity distribution company, under a long-term power purchase agreement.
The Project will start feeding electricity into the grid in the first quarter of 2015 and full commercial operations are expected to commence in July 2015.
According to AIIM's Regional Director for East Africa, Kameel Virjee, AIIF2 reached final close in September 2011 with total commitments of $500 million. "AIIF2 is designed to invest equity in a diversified infrastructure and infrastructure related assets portfolio, primarily within Sub-Saharan Africa," he explains.
"AIIF2 recognises that effective infrastructure is vital for economic growth and development of the African continent," he said.
