KenGen Guarantee Project

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The development objective of KenGen Guarantee Project for Kenya is to enhance KenGen’s ability to attract long-term private capital for the sustainable development of renewable energy. This project is an application of the World Bank Group’s Maximizing Finance for Development (MFD) approach. It is classified as both an MFD-implementing and MFD-enabling project as it will use scarce International Development Association (IDA) resources to mobilize private sector financing to strengthen the financial position of Kenya’s main power generation utility Kenya Electricity Generation Company Limited (KenGen) and set it on the path of financial sustainability. This is key for Kenya to create the enabling environment to attract long-term private investments for the sustainable development of renewable energy. Through this IDA Guarantee, the project will support a financial transaction for KenGen, refinancing existing commercial loans of shorter tenor and higher interest rates with a new commercial loan of longer tenor and lower interest rates,thus generating savings for the company. This is a corporate debt restructuring operation.