Announcements

November 21st, 2008

Construction of new 90MW diesel power plant in Rabai, Kenya

Aldwych International Ltd. (Aldwych) is pleased to announce the commencement of construction of a 90MW diesel power plant to be located at Rabai in Kenya.  The Rabai Power plant is the largest single investment, €114m, in Kenya since the establishment of the new administration and will be delivering much needed power to the national grid before the end of 2009.  The plant’s 90MW output is sufficient to provide power to up to 400,000 households and will be sold to Kenya Power & Lighting Company Ltd. (KPLC), through a 20-year Power Purchase Agreement.  The project was awarded on a build-own-operate-transfer basis through an international competitive bidding process.  Partnership of the project sponsors, Aldwych together with Burmeister & Wain Scandinavian Contractor A/S (BWSC), was formalised with the creation of Rabai Power Limited.

The Rabai Power plant will provide a stable source of electricity that will meet soaring demand for reliable and affordable power, and will also contribute to economic growth by combating crippling power shortages.  The new plant, located 20 km from Mombasa, will be not only the most efficient thermal fuel plant in Kenya but also one of the cleanest, as it will be operated to meet stringent international environmental and social standards.

The plant will provide significant financial benefits to Kenya.  Following the commencement of commercial operations, Aldwych and BWSC have forecasted significant savings as the plant will replace some of the older and more costly emergency diesel plants that are currently being used to bolster the constrained Kenyan power supply.

“Electricity is fundamental to Kenya’s economic prosperity and development.  In implementing the Rabai project we will do our very best to contribute to the Kenyan goal of providing a reliable and cost effective supply of electricity for the whole country”, stated Mark Fitzpatrick, Managing Director of Aldwych.

In addition to its positive financial impact, the Rabai project has other notable benefits for Kenya.

• The investment of €114m will give a significant boost to the Kenyan economy, providing many new job opportunities in the construction and service industries, particularly for the local community.
  
• The addition of much needed new generating capacity will help reduce the recent electricity rationing.
  
• During the construction period up to 300 people will be employed on site, both in skilled and non-skilled roles.  
  
• Following construction, Aldwych and BWSC will subsequently employ 50 skilled Kenyan technicians to manage and oversee the daily operation and maintenance of the plant.
  
• It is estimated that, in total, over 1,000 jobs will be created through direct and indirect employment from the project.
  
• A corporate social responsibility program will be implemented at the Rabai plant, which in turn will directly benefit and endeavour to protect the interests of both the local and the wider community.
  
• Rabai Power Limited will operate the plant in conformity with stringent environmental and social requirements.
  
• The Rabai plant will partially replace less efficient existing plants and reduce the need for expensive back-up diesel generators, with associated environmental and cost benefits.
  
• Private sector financing of Rabai will enable the Government of Kenya to conserve limited public resources for other priorities.
  

The project will be 70% financed by debt provided by the following European development finance institutions:  Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) of Germany, the Emerging Africa Infrastructure Fund (EAIF) based in the UK, European Finance Partners, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO) of the Netherlands, and Société de Promotion et de Participation pour la Coopération Economique (Proparco) of France;  5% by mezzanine finance provided by EAIF and Proparco;  and 25% equity provided by Aldwych, BWSC, FMO and the Industrialization Fund for Developing Counties (IFU) of Denmark.
The task of developing, financing, constructing and operating the 90MW diesel engine based power plant was awarded to Aldwych and BWSC on 30^th November 2006.

 “I am thrilled to have such experienced and professional sponsors responsible for the construction and operation of the power plant.  For Kenya, the project is a vital catalyst for the further development of the country, and I am confident that the sponsors will fulfil all their obligations.  I wish them every success in their new venture”, emphasised Joseph Njoroge, Managing Director and CEO of KPLC which was responsible for awarding the contract.