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SA banks join power plant deal in Ghana

Source: BD Live

A WIDE-ranging group of financiers and industrialists including several South African banks on Friday closed the $900m of debt and equity project finance for the Kpone Independent Power Plant and associated infrastructure in Ghana.

Kpone, a 350 megawatt combined cycle gas turbine plant in the Tema industrial zone close to Accra, is being developed by Cenpower Generation Company, a special purpose vehicle. Group Five announced in August it had been awarded the engineering, procurement and construction (EPC) contract worth R4bn, which is expected to take about three years to complete.

South African banks and construction companies have been expanding activities in the rest of Africa, where energy is one of the fastest-growing sectors. In the latest deal, Nedbank announced last week it had taken a 20% stake in West African banking group Ecobank Transnational.

Cenpower’s funding consists of $650m of debt and $250m of equity. Rand Merchant Bank (RMB), the investment banking division of FirstRand, was global co-ordinator and mandated lead arranger of the debt portion, with Nedbank and Standard Bank of SA also acting as lead arrangers. Nederlandse Financierings-Maatschappij voor Ontwikkelings Landen (FMO) was the arranger for the tranche contributed by development finance institutions. These were the Industrial Development Corporation and the Development Bank of SA, as well as Deutsche Investitions-und Entwicklungsgesellschaft (DEG) and the OPEC Fund for International Development.

The $250m equity in Cenpower will be 32% owned by a subsidiary of Africa Finance Corporation, 28% by Sumitomo of Japan, 21% by Cenpower, 15% by African Infrastructure Investment Fund II’s investment vehicle Mercury Power, and 4% by FMO.