Financing Cenpower Kpone 340 Mw IPP: Ghana
Financing Cenpower Kpone 340 Mw IPP: Ghana

 



The KIPP project will be the largest private IPP in Ghana when it comes on stream in 2017, accounting for approximately 10% of Ghana’s total installed capacity and approximately 20% of its available thermal generation capacity. As a combined cycle gas turbine (CCGT) plant, it will be amongst Ghana’s most fuel-efficient thermal power stations. Once in production, KIPP will be become a critical base-load component in meeting Ghana’s growing electricity demand.


IFD’s inaugural investment in a country outside of SADC was into a 340 MW combined cycle gas fired plant (CCGT) that is also able to use light crude oil (LCO) in Kpone, Ghana.


The Infrastructure Consortium for Africa defined the project as a landmark energy project.
The project also received four international awards:
• The African Banker Award: African Banker’s 2015 Infrastructure Deal of the Year
• The EMEA Finance Magazine : Best Power Deal in EMEA
• The pan-African Africa Investor (AI) Award: AI Best Power Deal of the Year 2015
• Thomson Reuters PFI Award (London): Africa’s Power Deal of the Year 2014.


Financial close of the required US$ 900 million of project finance to develop the Kpone Independent Power Plant (KIPP) in the Tema industrial zone, close to Ghana’s capital, Accra, was in October 2014. The DBSA committed to USD 53 million of the total project cost to the deal. The financing was part of the senior debt portion that was led by Nederlandse Financierings-Maatschappij voor Ontwikkelings Landen N.V. (FMO). 


The project finance comprises two components: a US$ 650 million debt tranche and a US$ 250 million equity tranche. The debt is being funded under export credit cover by a consortium of South African commercial banks and international development finance institutions (DFIs). Rand Merchant Bank (RMB) acted as the global lead bank and mandated lead arranger for the commercial banking tranche. Other South African banks involved in the transaction as mandated lead arrangers were Nedbank and Standard Bank. Nederlandse Financierings-Maatschappij voor Ontwikkelings Landen N.V. (FMO), the Dutch Development Bank, acted as the mandated arranger for the DFI tranche.


Via the equity raising, three leading investment groups will be joining the equity consortium, whilst InfraCo, the principal project co-developer since inception, will be exiting. The new investors are Sumitomo Corporation of Japan, African Infrastructure Investment Fund II and its co-investors (via an investment vehicle called Mercury Power) and FMO. Post-financial close, the equity holders in Cenpower now are AFC Equity Investments Limited (a wholly-owned subsidiary of the Africa Finance Corporation (AFC) (31.85%), Cenpower Holdings Limited (21%), a consortium of Ghanaian investors, (21%), Sumitomo Corporation (28%), Mercury Power (15%) and FMO (4.15%).

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