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Kenya

Thika Power Limited

$EUR40 million
Power
SPG
Proposed
Thika

Project Facts

Project Facts

Project Facts

Kenya
Guarantee Holder
Azura Power Holdings Limited and/or any of its subsidiaries
Investor Country
Mauritius
Environmental Category
A
Date SPG Disclosed
October 12, 2018
Projected Board Date
December 01, 2018
Project Type
Non-SIP

Project Description

The Thika Power Plant is an 87MW combined cycle plant 35 kilometers from Nairobi. The entire power output is contracted to Kenya Power and Light Company (KPLC) on a 20-year PPA, from 2013–2033. The plant was commissioned in 2013 and consists of five heavy fuel oil generators and a 7MW steam turbine.

In addition to MIGA’s political risk insurance coverage, the construction of the existing Thika Power Plant was supported by a loan from the International Finance Corporation (IFC) and a political risk guarantee from the International Development Association (IDA), in support of KPLC’s payment under the PPA. MIGA and IDA obtained board approval for the existing project in 2012, while the IFC obtained it in 2011.

The Guarantee Holder has applied for MIGA guarantees covering up to €40 million of equity/quasi-equity/shareholder loans (EQS) investments into the project. The guarantees will have a term of up to 15 years, providing coverage against the risk of expropriation, transfer restriction, breach of contract, and war and civil disturbance.

Environmental Categorization

The project is a category A under MIGA’s Policy on Environmental and Social Sustainability. Click here for the project’s Environmental and Social Review Summary.

Development Impact

The primary development impact of the project is to support Kenya’s electricity sector by ensuring stability of electricity as well as enhancing energy security in the Thika industrial zone, located 35 kilometers from Nairobi. As a "peaker plant", the project is critical in (i) reducing dependency on hydropower and (ii) ensuring the provision of electricity during droughts and intermittency of wind and solar projects. The Thika Power Plant is a less expensive alternative to emergency diesel-fired plans, which had been used to address energy shortfalls, particularly during droughts. The project’s ongoing operation will continue to support local employment, tax revenues and the purchase of local goods and services. MIGA’s support of the project is aligned with the agency’s focus on countries eligible for financial support from IDA.