Kenya Power company has acquired a US$10mn loan facility from the United Bank of Africa (UBA) to upgrade its infrastructure to distribute 5,000MW by 2017.
A US$10mn loan facility from UBA will boost the capacity of transmission lines. (Image source: Telecoms-wxin).
According to Kenya Power, this is part of a syndicated loan from a number of lenders to finance the planned infrastructure expansion by the firm, the country’s sole power distributor.
The financing will be used to boost the capacity of transmission lines, upgrading existing substations and constructing 37 new ones, while also installing new equipment in the power grid.
“Completion of these capital investments on time is critical for long-term viability of our company. It will also make Kenya attractive as an investment destination,” said Ben Chumo, Kenya Power managing director.
In the recent past, industrialists have complained of power outages occasioned by aging infrastructure, leading to increased cost of production as companies have been forced to install stand-by generators. This has made locally produced goods less competitive in the regional markets.
UBA, whose parent firm is in Nigeria, entered the Kenyan market five years ago and has now ventured into financing the local power sector.
“We remain committed to a continued relationship with Kenya Power and other key players in the public sector to take on similar or larger projects especially in energy and the infrastructure sector,” noted Isaac Mwige, the chief executive of UBA Kenya.
The bank has operations in 19 African countries and has international offices in New York, Paris and London.