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World Bank Insures 80mw Independent Power Project

June 30, 2014



THE World Bank has given an insurance coverage worth $27.9 million (Sh2.4 billion) to Standard Bank of South Africa, the lender financing an 80-MW power generation project in Kenya.

World Bank through its credit guarantee arm Multilateral Investment Guarantee Agency has given the assurance to the SA bank in case the lender - Gulf Power Limited - defaults, a way of supporting the 80-MW heavy fuel power generation plant located in Athi River, 20 km from Nairobi. Gulf Power is part of several independent power producer plants being developed by the Kenya government.

"Our collaboration with MIGA is helping lenders get comfortable with the risks, and ultimately delivering a diversified energy mix to meet the huge demand for power generation," said International Finance Corporation's director for syndicated loans, Stefania Berla.

The loan was arranged by IFC which is the World Bank's private sector lending arm.

"Kenya's power sector needs over $5 billion of new investments by 2015 for electricity generation alone," said the statement.

Gulf Power will sell the electricity generated to distributor Kenya Power for 20 years under a power purchase agreement.

The guarantee given under the World Bank agency provides the South African bank with assurance of compensation in the event the project enterprise defaults on its repayment due to war or civil disturbance.


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Source: AllAfrica


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