Kipevu III to benefit from KenGen PIBO

July 9, 2009

, NAIROBI, Kenya, Jul 9 – Financing for the proposed 120MW Kipevu III thermal plant in Mombasa is expected to come from proceeds of a proposed Public Infrastructure Bond (PIBO).

KenGen Managing Director Eddy Njoroge said the proposed Sh15 billion PIBO is still awaiting approval by the Capital Markets Authority (CMA).

"The Kipevu III thermal power plant is expected to be commissioned in October 2010," Mr Njoroge said adding that the plant will help KenGen expand its generation capacity and diversify power sources.

He said the features of the proposed PIBO will be announced once the requisite regulatory approvals have been received.

The proposed KenGen PIBO comes on the back of the Government\’s Sh18.5 billion infrastructure bond early this year. The bond reported a 45 percent oversubscription, with bids for Sh26.9 billion received.

"This demonstrates there is an unsatisfied demand for long term debt instruments which KenGen would like to use to finance investments in additional power generation capacity,\’\’ Mr Njoroge said.

He pointed out that KenGen\’s decision to seek funds from the Debt Capital Market was a break from the company\’s previous funding schemes which relied heavily on development financiers.

\’\’The Debt Capital Market gives KenGen an opportunity to raise funds to finance our capital expenditure in a flexible manner, while at the same time allowing Kenyans to participate in infrastructural development through an attractive investment opportunity," he said.

He said the investment in additional power generation capacity is part of KenGen\’s five-year strategy (2008-2012) of increasing its capacity by 500MW to stabilize electricity supply in Kenya.

"This will enable us continue with our critical role of ensuring there is enough additional capacity to cope with the rising demand anticipated at eight percent annually," Mr Njoroge said.

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