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AFC leads in financing of the landmark US$900 million Kpone IPP

The Africa Finance Corporation (AFC) has today executed the financing of the Cenpower Generation Company Limited (Cenpower), which is implementing the Kpone Independent Power Project (Kpone IPP), a US$900 million project comprising a 350 megawatt (MW) combined cycle gas turbine power plant, a 161kV substation, liquid fuel (Light Crude Oil and Distillate) storage, delivery and supply infrastructure and Working Capital Financing for fuel. To be located in Tema, near Accra, the Kpone IPP will provide an additional 10% of Ghana’s generation capacity when it comes on-stream in 2017, 20% of its available thermal generation, and supply power to approximately 1 million households.

Kpone IPP has been in development for over ten years and registers a number of significant firsts: It is the first greenfield project finance IPP in Ghana; it is the largest IPP in Sub-Saharan Africa in the last 10 years; it is the largest private power plant financed in Sub- Saharan Africa; and it is Sumitomo Corporation of Japan’s first thermal IPP investment in Africa. The plant will be constructed by Group Five of South Africa.
 AFC, a multilateral finance institution, was established in 2007 with a capital base of US$1 billion, to be the catalyst for private sector infrastructure investment across Africa. AFC fills a critical void in providing project structuring expertise and risk capital to address Africa’s infrastructure development needs, and is increasingly being seen as the benchmark institution for private sector investment in the core infrastructure sectors of power, natural resources, heavy industry, transport, and telecommunications.
 AFC is the lead project developer, mandated lead arranger as well as the single largest equity investor in the project. The project was initiated in 2003, by Cenpower Holdings Limited, representing a group of Ghanaian entrepreneurs. In 2005, the group partnered with Infraco. In 2010, AFC acquired a controlling equity stake in Cenpower and assumed the role of lead project developer. Today, following the exit of InfraCo, the equity investors in the project will together provide equity funding of circa US$250-million. They include Africa Finance Corporation, through AFC Equity Investments Limited, a wholly-owned subsidiary of AFC (31.85%), Sumitomo Corporation (28%), Cenpower Holdings Limited (21%), Africa Infrastructure Investment Managers (AIIM) (15%) and FMO (4.15%).

AFC is the Global Lead Arranger of the US$650 million debt funding for the project. The debt funding comprises a $446 million 15-year commercial bank export credit backed facility, with Rand Merchant Bank (RMB), a division of FirstRand Bank Limited, as the global coordinator, initial mandated lead arranger, book runner and hedging coordinator and a 15-year development finance facility totaling US$204 million, arranged by FMO, the Dutch Development Bank.
 Andrew Alli, President & Chief Executive Officer of the Africa Finance Corporation in recognizing the transformative impact of the project remarked “AFC’s long term vision is to help address Africa’s infrastructure deficit and ensure sustainable economic growth for the continent. The full growth of the Ghanaian economy cannot be realised without an efficient and functioning energy sector. Power is one of AFC’s high priority sectors for investment, and arguably Africa’s most significant need.
 The exceptional feature of the project is that it is African. The initiative was African, as were the founding shareholders and the construction company. Moreover, 67% of the equity is held by African entities, 83% of the senior debt is issued by African lenders and the African commercial banks involved provide 70% of the total debt. AFC was created to address the infrastructure investment deficit and is privileged to be providing an African private sector investment solution, to drive economic growth and industrial development in Ghana”.

Oliver Andrews, Executive Director, Chief Investment Officer and Head of the Cenpower Project Development Team, said: “This is another key milestone for Cenpower as we achieve financial close. As co-developer and lead investor in Cenpower, through AFC Equity Investments Limited, we are delighted to bring to the table both long-term infrastructure financing and project development expertise in a project of many firsts, ably demonstrating Africa’s ability to lead on the path to Africa’s economic transformation. ”I am delighted to welcome on board long-term investors of the international standing and calibre of Sumitomo Corporation, AIIM and FMO. It reflects Africa’s increasing appeal as an investment destination and the commitment of the private sector to address the continent’s infrastructure funding gap.”

Samuel Nana Brew-Butler, Chairman of Cenpower, concluded: “I should like take this opportunity to thank the team at InfraCo for sharing our vision for Kpone and for their contribution in bringing the project to this stage. Recognizing the crucial role that Cenpower will play in meeting Ghana’s future electricity needs, we and our equity investors are all now galvanized to bring Kpone into production on time and on budget.”

Notes to Editors

About Cenpower
• Cenpower Generation Company Limited (‘Cenpower’) is a special purpose vehicle that is developing a 350MW, light crude oil and gas fired, combined cycle power plant in the municipality of Kpone within the Tema industrial zone, near Accra, Ghana (‘the Kpone IPP’). The Kpone IPP is one of the largest infrastructure projects currently under development in West Africa. A well-developed project with a very robust commercial structure, Kpone enjoys the strong support of the Ghanaian Government. The key commercial agreements, including the Power Purchase Agreement and the Government Consent and Support Agreement, have been approved by Cabinet and Parliament.

About AFC – www.africafc.org

About the AFC:

• AFC is an African-led multilateral development finance institution, established in 2007, with amission to improve African economies by proactively developing and financing infrastructure, industrial and financial assets.

• AFC is involved as an investor, developer and financier of various infrastructure projects, and is gaining recognition as the benchmark institution for financing the development of infrastructure projects in Africa.

• AFC’s current authorized share capital is USD2.0 billion with shareholders’ funds of USD1.28 billion and a 2014 funding programme in excess of USD900 1billion .

• AFC is one of the highest investment grade-rated multilateral finance institutions on the African continent, with an A3 (long term) /P2 (short term) foreign currency debt rating by Moody’s Investors Service.

AFC’s projects:

• AFC is a partner with Vigeo Holdings Limited and Tata Power Delhi Distribution Limited for the acquisition of power distribution assets, and a lead financier in the acquisitions of the Kainji and Ughelli power generation plants in the current Nigerian Government power sector privatisation round.

• AFC is the lead investor in the award winning Cabeolica project, a USD90 million, 26MW landmark renewable energy wind power project in Cape Verde.

• AFC is the Technical Adviser to the Central Bank of Nigeria (CBN) on the CBN’s USD2.0 billion Power and Aviation Intervention Fund (PAIF).

• AFC is the lead investor in the Main One fibre optic cable project, enhancing West Africa’s connection to Europe and the rest of the world through faster and more technologically advanced broadband capacity.

• AFC provided a USD50 million convertible debt investment in ARM Cement Limited (ARM), the second largest cement operator in Kenya to support expansion initiatives across Eastern and Southern Africa including; development and construction of a lime plant in Tanzania and expansion of ARM’s cement capacity in Kenya. The transaction marked AFC’s first bilateral investment in Kenya.

• AFC provided financing for Ethiopian airlines fleet expansion in the acquisition of Africa’s first Boeing 777 airline.

• AFC also invested in the Bakwena toll road project in South Africa, and in the EURO 270 million Konan Bedie Toll Bridge in Côte d’Ivoire; the signature Transport PPP project in Francophone Africa, underscoring its interest in investing in PPPs/PFIs in its focal sectors across the African continent.

• AFC launched a landmark USD15 million project development facility with the Dutch Development Bank FMO in January 2013, to fund early-stage equity investments in projects under development pre-financial close, in the infrastructure sector across sub-Saharan Africa.

• The AFC has established partnerships with national, regional and international organizations and with sponsors that are active in the infrastructure space in Africa.

For more information, contact:

For more information, contact:
 Oliver Andrews
 Executive Director & Chief Investment Officer
 Africa Finance Corporation, 3a Osborne Road
 Lagos, Nigeria
 Tel: + 234 1 279 9600
 Email: oliver.andrews@africafc.org

Dr. Adesegun Akin-Olugbade, OON
 Executive Director & General Counsel
 Director AFC Equity limited
 Africa Finance Corporation, 3a Osborne Road
 Lagos, Nigeria
 Tel: + 234 1 279 9600
 Email: adesegun.akin-olugbade@africafc.org

Lucy Savage
 Vice President, Corporate Communications
 Africa Finance Corporation, 3a Osborne Road
 Lagos, Nigeria
 Tel: + 234 1 279 9600
 Email: lucy.savage@africafc.org

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