Africa, Finance, News, Small Hydro

Agreement signed to finance, build Kenya’s 14.7-MW Kaptis small hydropower project

Project developer Tembo Power has signed a joint development agreement with Metier and its partner WK Construction that allows the partners to appoint lenders and prepare for financial closing, expected this year, and to start construction on the 14.7-MW Kaptis small hydropower project in Kenya.

Kaptis is a run-of-river hydroelectric project in western Kenya that Tembo Power started the development of in 2013 after its Kenyan partner Humphrey Mulindi identified the site and conducted preliminary investigations to assess its potential. Since then, Tembo Power has expanded its Kenyan portfolio with additional 17-MW and 24-MW hydropower projects that are currently in development.

These projects are aimed at delivering sustainable hydropower to western Kenya, currently fed by power imports from Uganda and diesel power generation.

Metier is an independently owned private equity fund manager. The project will form part of the Metier Sustainable Capital International Fund II, which recently achieved a first close of 113 million. Metier has committed to provide financial support prior to actual financial closing of the project, as well as to subscribe to a 40% stake in the project. WK Power will hold 20%, while Tembo Power shall retain 40%.

Equity has been fully secured and development finance institutions are being appointed for senior debt.

WK Construction will be the preferred engineering-procurement-construction contractor for the Kaptis project. Tembo Power will benefit from the existing relationship between Metier and WK Construction, which constructed and commissioned the 5.25-MW Sindila hydropower project in Uganda last year.

“We are excited about the prospects of the Kaptis hydropower project as well as the broader Tembo Power portfolio, which fits in well with the fund’s strategic focus on small to medium-scale renewable energy projects across the continent,” said Michael Goldblatt, principal, Metier Sustainable Capital International Fund II. “We are looking forward to making an investment into the Kenyan energy sector and delivering clean energy in support of the Kenya Power and Lighting Company’s power supply objectives.”

Tembo Power’s objective is to develop, finance and operate power generation assets in sub-Saharan Africa and is currently raising $100 million for its first batch of projects totaling 187 MW across Kenya, Burundi and the Democratic Republic of Congo. 

“Tembo Power is delighted to partner with Metier, a reputable and experienced infrastructure fund manager in Sub-Saharan Africa, supported by the main development finance institutions active in the renewable energy field,” said Raphael Khalifa, founder of Tembo Power. “Such agreement demonstrates the thoroughness of Tembo Power’s development approach, its compliance with the most stringent international standards, and paves the way for extended collaboration with Metier and other key players in the industry.”

WK Construction is contractor in the field of hydropower in sub-Saharan Africa.

This article was originally published by ESI Africa and was republished with permission.