Kpone Independent Power Project

Active

In October 2014 Kpone IPP project involving the development of a 340MW CCGT in the municipality of Kpone reached financial closure, as the project has closed a $900 million project finance loan. This BOO project was expected to begin in the second half of 2014 and commercial operations were expected to begin in 2016. The project development includes two General Electric frame 9E gas turbines, two double pass heat recovery steam generators from NEM of the Netherlands, a Siemens' Steam Turbine, Electrical Generators and Auxiliaries. This project was developed by Cenpower Generation Co, an SPV established by Cenpower and AFC and InfraCo. InfraCo left the project as a result of a share purchase agreement on 24 September 2014. The new sponsor group included AFC (31.85%), Cenpower Holdings (21%), Sumitomo Corp (28%), African Infrastructure Investment Managers(15%, AIIM, Macquarie & Old Mutual) and FMO (4.15%, Dutch Development Bank). The consortium's legal adviser was Trinity International while Allen & Overy advised Sumitomo Corp separately on the deal. Financing comprised US$420 million long term debt, US$250 million equity and US$225 million credit facility financing. US$420 million 15 year loan was arranged by FirstRand as Global MLA and Coordinating Bank while Standard Bank of South Africa and Nedbank were Co-MLAs on the same tranche. FMO and OPEC Fund for International Development lended US$225 million in addition to the project. The loan agreements were signed on October 2 2014. As for the brief summary of the project history,in April 2010, Africa Finance Corporation, local partner Cenpower and PIDG-backed Infraco were planning to develop a 340MW CCGT in Tema, Kpone. The Kpone IPP would cost US$450 million, backed by equity from the three sponsors, and an AFC-arranged debt package. AFC would tap other DFIs, as well as ECAs and international and local commercial banks for loans. The project site was adjacent to the West African Gas Pipeline landing point, and a planned 330kV transmission corridor and 161kV substation. The sponsors were aiming to get the facility operating in 2013. In Dec 2012, Rand Merchant Bank had been appointed MLA of the debt funding for the 340MW Kpone Independent Power Project near Tema. It would be supported by the Export Credit Insurance Company of South Africa. The US$600 million power plant combines cycle gas turbine technology using GE frame 9E gas turbines and would operate on both natural gas and liquid fuel to ensure high and continuous power supply. Local firm Cenpower Generation Company was behind the project. Africa Finance Company with a 76% stake, Infraco Ltd and Cenpower Holding Company were shareholders of the project, making it one of the largest African private sector-owned power projects. South Africas Group Five and Consolidated Power of South Africa were the contractors. A 20-year PPA had been signed between Cenpower and the Electricity Company of Ghana. Initial preparatory work began in 1999. In November 2013, credit approvals were nearly complete for the 340MW Kpone Independent Power Project near Tema, with financial close expected early next year. Rand Merchant Bank was MLA and would take the majority of senior debt, bringing in two or three other South African banks at close. There would also be a DFI tranche, supported by the Export Credit Insurance Company of South Africa. Tenors would be somewhere between 10 and 15 years. The capex had increased from the original US$600 million as the developers had been unavailable to secure a long-term gas contract from the West African Gas Pipeline and as a result had opted to start production with baseload liquid fuel, rather than dual-fuel. The construction of a liquid tank and offshore oil terminal along with extra working capital facilities for procurement risk mean the capex had increased to just below US$1 billion. The project would run off liquid fuel for the first few years until it could access Ghana gas, probably through the http://www.cenpowergen.com/history.html http://www.engineeringnews.co.za/print-version/kpone-independent-power-plant-project-ghana-2015-01-23 https://ijglobal.com/data/transaction/20733/kpone-gas-fired-plant-ipp-340mw Others equity=FMO