Financiers appointed for 15-MW Kaptis hydropower project in Kenya

The Emerging Africa Infrastructure Fund (EAIF) and Finnfund have been confirmed as senior debt lenders to conduct due diligence for the 15-MW Kaptis run-of-river hydropower project in Western Kenya.

Ninety One SA (Pty), formerly Investec Asset Management, a duly authorized agent for the Private Infrastructure Development Group’s (PIDG) EAIF, will act as Mandated Lead Arranger for the financing of the Kaptis project, which is sponsored by Tembo Power, Metier and WK Power.

The project will require $30 million in debt financing to bring it through the final design, planning and construction phases, with a targeted commercial start date in the third quarter of 2022. Tembo Power, together with partners Metier and WK Power, will inject about $14 million in equity.

“I am pleased to welcome EAIF/Ninety One and Finnfund to our consortium for the actual construction of Kaptis. These two lenders are major players in the African infrastructure sector with specific knowledge of Kenya’s regulatory environment and demonstrated success in financing small hydropower projects in Sub-Saharan Africa. This is another significant step towards financial closing later this year,” commented Raphael Khalifa, founder, Tembo Power.  

Paromita Chatterjee, an investment director — EAIF at Ninety One, says: “EAIF is delighted to have been appointed the lead arranger of the debt finance for the Kaptis hydro electricity project. The Fund, with PIDG, brings a unique combination of patient lending, deep knowledge of infrastructure finance and a record of commitment to renewable energy.”

“Finnfund has a long history of financing hydropower projects as well as participating in the Kenyan power market, e.g. through being a shareholder in Lake Turkana Wind Power since 2013. It will be our pleasure to work together with the Sponsors and EAIF to provide renewable electricity to Western Kenya,” says Finnfund Investment Manager Eero Pekkanen.

The company’s objective is to develop, finance and operate power generation assets in sub-Saharan Africa according to the same financing model. Tembo Power is raising equity financing for a portfolio of 10 projects, totalling 186 MW, across Kenya, Burundi and the Democratic Republic of Congo. Run-of-river hydropower is one of the most environmentally friendly energy technologies globally.

Projects between 10 MW and 50 MW offer inexpensive and reliable electricity in areas where the national electrical utilities need it most.

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


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