OPIC approves financing Kenyan wind project

The Board of Directors of the Overseas Private Investment Corporation (OPIC) has approved up to US$233 million in financing to support construction and operation of the 100 megawatt Kipeto wind power project in Kajiado County in Southern Kenya.

The project is comprised of 60 WTG turbines of 1.7 MW each, with a hub height of 80 meters and blade diameter of 103m. The turbines will be supplied by General Electric. The site will be located on a 70km2 land area situated at 2,000m altitude within the Esilanke area, leased from mostly local landowners and currently used for agricultural purposes.

Total project costs are estimated at circa US$316 million.

The shareholders are funds advised and managed by African Infrastructure Investment Managers (AIIM) (holding 55%), Craftskills Wind Energy International Ltd (holding 20%) and IFC (holding 20%). The remaining 5% of the shares will benefit the Kipeto Community Trust (Kipeto Trust).

This source of renewable power would make a significant contribution to the installed energy capacity in Kenya, where up to 80% of the population currently lacks electricity access.

The Kipeto project also affirms OPIC’s role supporting President Obama’s Power Africa initiative, which aims to catalyze private investors to lead the way in spreading new energy access for the more than 600 million Sub-Saharan Africans currently living without power.

In late October we reported that the International Finance Corporation (World Bank) was considering financing the project. The proposed IFC investment includes an equity investment in Kipeto Energy Limited (KEL), the SPV of the project, of approximately US$ 20.5 million (including the funding of Kipeto Trust’s free carry, pro rata with AIIM), for IFC’s own account.

The OPIC Board has also approved up to US$42 million in financing to support the India 2020 Fund II, a private equity fund sponsored by Lighthouse Funds, LLC that would focus on investments in the Indian consumer, healthcare, and education sectors.

Elizabeth Littlefield, OPIC’s President and CEO, stated:

"These first board approvals of the 2015 fiscal year demonstrate OPIC’s broad approach to supporting private sector development in emerging markets. Whether supporting inclusive growth of South Asian business or addressing the acute need for energy access in Africa, OPIC is helping investors realize the investment opportunity inherent in sustainable economic development overseas."