AIIM portfolio company, Cenpower announces financial close of USD900m project financing for construction of independent power plant

06 Jan 2015

Following the fulfilment of the conditions precedent to its debt financing agreements, Cenpower Generation Company Limited (Cenpower) announced the financial close of the circa USD900 million project financing required for the construction and development of the Kpone Independent Power Project (KIPP) on 23 December 2014. KIPP is a 350MW combined cycle multi-fuel power station to be located near Tema, Ghana. Once construction is complete, it is expected to be the largest IPP in the country which will account for approximately 10% of Ghana’s installed capacity.

African Infrastructure Investment Fund 2 (AIIF2), which is advised by African Infrastructure Investment Managers (AIIM), a joint venture between Macquarie Africa and the Old Mutual Investment Group, together with its co-investors, owns a direct interest of 15% in Cenpower, through an interposed investment vehicle, Mercury Power. Mercury Power has also subsequently increased its economic exposure to the project to around 30%, through its investment in another of Cenpower’s shareholders, Cenpower Holdings Limited. Cenpower Holdings Limited is the investment vehicle through which the founding local shareholders of Cenpower will hold their investment in KIPP.

Other shareholders in Cenpower include Africa Finance Corporation, Sumitomo Corporation and FMO, the Dutch Development Bank.

AIIF2 and AIIM are also involved in Nigeria’s Azura-Edo IPP, a 450MW gas-fired IPP, which will be located in Edo State, Nigeria. The financing documents for the Azura-Edo IPP were signed in December 2014, and financial close is expected in early 2015.

AIIM CEO, Jurie Swart says: “Cenpower represents AIIF2 and AIIM’s first investment in Ghana, which is a jurisdiction we have been keen to invest in for some time. We are very proud to be associated with the ground-breaking Kpone IPP, which will be a key part of plans to alleviate the power supply shortfalls currently being experienced in Ghana. We expect that it will be the first of many IPPs, where the private sector and international investors can play a meaningful role in strengthening Ghana’s power sector.

“Investors around the globe have embraced infrastructure as an asset class as it provides stable and growing earnings and cashflow. Infrastructure is a lower risk access platform to Africa’s growth story. Currently we believe there is a large infrastructure gap in Africa but demand for it is strong and growing,” says Swart.

For more, please see here.

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