Chinese bank ICBC to finance $2b Kenyan coal power plant
Source: www.chinamining.org Citation: Xinhua Date: February 13, 2015
The Industrial Commercial Bank of China (ICBC) has agreed to provide a majority of the funds required to construct Kenya`s 1,000-megawatt (MW) coal-fired electricity generating plant, officials said on Wednesday.
Amu Power Group CEO Francis Njogu told a media briefing in Nairobi, capital city of Kenya, that the Chinese bank will provide $1.2 billion out of the $2 billion required to construct the facility.
Njogu said an environmental and social impact assessment is being carried out and is expected to be completed by mid-March.
"We hope to reach financial closure soon so that construction can begin in the third quarter of 2015," Njogu said.
Construction of the plant is expected to take 21 months.
Other financiers of the power plant will be local banks, which will provide around $300 million while the shareholders of Amu power have committed to providing 500 $million. The African Development Bank (AfDB) will provide a partial risk guarantee for the project.
Amu power is a consortium of local companies led by Gulf Energy and Centum Investment Group that was awarded a tender to construct Kenya` first coal power electricity plant in September 2014.
Njogu said his firm has already signed a 25-year power purchase agreement with Kenya`s sole power distributor, Kenya Power.
The CEO noted that the coal power plant will be Kenya`s first project to be carried out under the private-public partnership framework.
He said that Kenya generates 821 MW of hydro-electric power which has 30 to 40 percent reliability due to fluctuations in the rainfall season, adding that coal has been proven to be the most reliable as well as the least-costliest source of power after nuclear.
Data from the country`s ministry of energy indicates that only 2.7 million households are connected to the national grid out of the country`s 9 million households.
In order to increase the uptake of electricity, Kenya launched an ambitious plan to increase the nation`s installed electricity capacity to 6,600 MW by the end of 2016.
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