EAIF and Finnfund appointed for the senior debt financing of Metier-backed hydropower project

Posted on: 17 April, 2020 at 8:03 AM

Tembo Power has finalised the appointment of Emerging Africa Infrastructure Fund (EAIF), managed by Ninety One (formerly Investec Asset Management), and Finnfund as senior debt lenders to conduct due diligence for Kaptis, its flagship project in Western Kenya.

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 its partners Metier and WK Power, will inject approximately $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,” says Raphael Khalifa, founder, Tembo Power.

EAIF is a provider of long-term debt to private infrastructure projects in Africa, with a long track record of successfully financing IPPs including over six hydropower plants in the last four years. Ninety One is one of the largest third-party investors in credit, private equity, public equity and sovereign debt across the African continent.

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

Finnfund is a development financier and professional impact investor offering equity, long-term loans and mezzanine financing to private companies operating in developing countries. Renewable energy is Finnfund’s largest sector.

“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 2014. It will be our pleasure to work together with the sponsors and EAIF to provide renewable electricity to Western Kenya”, says Finnfund’s investment manager, Eero Pekkanen.

Tembo Power is currently raising equity financing for a portfolio of 10 projects, totalling 186MW, across Kenya, Burundi and the Democratic Republic of Congo.

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