Iberafrica Power Ltd.

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Iberafrica Power Ltd, a subsidiary of the Union Fenosa ACEX, a Spanish electricity distribution company, was the primary developer of a 56-MW, US$65 million power plant near Nairobi, Kenya. The other equity participant was Union Fenosa who provided US$12.5 million for the development and design of the project and was responsible for operations and maintainance activities. Local equity investors included the pension fund of the national utility, Kenya Power & Lighting Co. (KPLC). Allen Diesels, a subsidiary of the Rolls Royce Plc, was the primary contractor and equipment supplier (8x5.8-MW). Construction began in late 1996 and the plant became partially operational in June 1997. A 7-year PPA was signed with Kenya Power and Lighting Ltd. (KPL) with a buy-back option at the end of the seven-year period. Over the course of the first seven year term, the contract for the project had been controversial and raised charges of corruption. However, in August of 2004, the government agreed to renew its contract with Iberafrica Power Ltd while the company agreed to cut its tariffs by 50 percent. In 2008, the Energy Regulatory Commission of Kenya approved a major long-term power buying deal between IberAfrica Power and Kenya Power and Lighting Company (KPLC) to feed 50MW into the national grid. A similar agreement made between Mumias Power Plant (#5184) at the same time, stipulated a price of US$0.06/kWh.