Actis quits thermal power sector after sale of 30pc stake

UK private equity firm Actis has exited its Kenyan thermal power interests by selling its stake in Mombasa-based plant Tsavo Power, commonly referred to as Kipevu II, to two foreign investors.

Actis has sold its 30 per cent stake in Globeleq Africa, the energy company that owns the 75 megawatt (MW) Tsavo, to the CDC Group and Norwegian development financier Norfund.

Globeleq has power plants in Cameroon, Tanzania, Cote d’Ivoire and South Africa and the sale includes the share of energy assets in these markets.

The CDC Group and Norfund bought the 30 per cent stake for $227 million (Sh23.8 billion).

“We are proud of what we have achieved over the past decade in terms of creating a much needed energy infrastructure in Africa. We are confident that CDC and Norfund, working as direct investors with Globeleq Africa’s management team, can successfully continue that work,” said Actis senior partner Torbjorn Caesar.

The Tsavo power plant began generating power in 2001 and signed a 20-year power purchasing plan with Kenya Power.

Globeleq has installed a total of 1,234 MW in all its markets. Globeleq is also one of the firms that bid to put up the 500MW gas-fired plant in Wajir. Foreign firms are showing interest in the local energy market encouraged by the government plan to add 5,000MW over the next two years.

Most energy companies have focused on renewable energy – especially geothermal. “The largest share of new geothermal power capacity came on line in Kenya, underscoring the growing emphasis on geothermal energy in East Africa,” said the REN21 Renewables Global Status report.

READ: Actis reduces Umeme stake by two-thirds

Kenya added 384 MW of geothermal power in 2014 which is more than half of the 640MW of additional global capacity that came through that year.

Despite exiting the energy business, Actis has not severed all links and is incorporating renewable technology solutions for its real estate projects.

Actis is among investors who put up the $540 million (Sh54 billion) Garden City mixed development along Thika Road. The company recently announced it is developing the Garden City Business Park next to the Garden City Mall, the second phase of the development.

The Kipevu Project original shareholders were Wartsila NSD Power Development Inc as the principal developer with 23 per cent, Cinergy Global Power Ltd and Industrial Promotion Services(Kenya) Ltd as lead joint-venture holders with 47 per cent and CDC with 30 per cent.

IFC was to take up to a 10 per cent share and cut Wartsila’s stake to 13 per cent.