Kenya Power secures Sh50bn syndicated long-term loan
Kenya Power staff repair power lines in Nyeri. The loan comes after the firm received a huge boost for its low-cost electricity connection project. PHOTO | FILE
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Kenya Power says the deal will enable it offset all the loans it has procured from several local lenders at higher interest rates.
Kenya Power has secured a Sh50 billion long term syndicated loan guaranteed by the World Bank’s International Development Association (IDA) to refinance its loans. The facility to be dispensed through Standard Charted Bank (StanChart) is in two tranches — a Sh35 billion 10-year loan and a Sh15.1 billion seven-year loan.
The utility Wednesday said the deal would enable it offset all the loans it has procured from several local lenders at higher interest rates.
“The proceeds of the facilities will be applied towards refinancing KPLC’s existing commercial loan facilities,” said Kenya Power in a statement.
“The loans would enable Kenya Power reduce its total financing costs, extend maturities beyond existing terms, and improve its liquidity position.”
The new facility has a two-year grace period followed by equal semi-annual repayments. The firm said it will improve its ability to fund future capital expenditure through internal sources.
StanChart was the lead arranger and receiving bank for the loan. The loan comes after Kenya Power received a huge boost for its low-cost electricity connection project.
On Monday, the African Development Bank (AfDB) approved a Sh13.5 billion loan for the project which will see about 300,000 households and businesses within a 600-metre radius to a transformer linked to the national grid.
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