The business of electricity supply in Kenya is undergoing significant transformation with the introduction of Independent Power Producers (IPPs) into the market.
Historically dominated by state-owned Kenya Electricity Generating Company (KenGen), the electricity sector now has increased competition as IPPs are set to be granted licenses to sell electricity directly to consumers.
This shift, outlined in the Energy (Electricity Market, Bulk Supply and Open Access) Regulations of 2024, aims to create a more robust and transparent electricity market that includes both wholesale and retail components.
IPPs currently supply approximately 33.5% of the electricity purchased by Kenya Power, yet they account for a disproportionate share of costs, raising concerns about pricing and contractual agreements.
Rabai Power Ltd
Rabai Power Limited operates a 90 MW thermal power plant located in Kilifi County, Kenya.
The ownership structure of Rabai Power is comprised of several key stakeholders.
Burmeister & Wain Scandinavian Contractor A/S (BWSC), a Danish company, holds a 25.5% stake in the project. BWSC specializes in the engineering, procurement, and construction of power plants.
Aldwych International Ltd, based in the UK, owns a 34.5% share and focuses on developing and operating power projects in emerging markets.
Additionally, Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), a Dutch development bank, holds a 20% stake in Rabai Power, promoting sustainable investments in developing countries.
Investeringsfonden for Udviklingslande (IFU), another development fund from Denmark, also owns a 20% stake.
lIberafrica Power EA Ltd
Iberafrica Power Limited is an IPP based in Nairobi, operating a thermal power plant with a capacity of 52.5 MW.
The company was recently acquired by A.P. Moller Capital from Naturgy, marking A.P. Moller Capital’s first investment in Kenya.
This acquisition aligns with their strategy to invest in infrastructure assets across Africa, particularly in the energy sector.
Iberafrica has been supplying reliable base load power to the national grid since it commenced operations in 1997.
Tsavo Power Company Ltd
Tsavo Power Company Ltd operates the Tsavo Thermal Power Station, also known as Kipevu II Thermal Power Station, which is located in Mombasa.
The power station has a capacity of 75 MW and commenced operations in 2001.
The ownership structure of Tsavo Power Company includes a consortium of international investors.
The largest stakeholder is a consortium comprising AKFED and Cinergy Global Power Inc., which holds 47% of the shares.
Other significant shareholders include the CDC Group with 15%, Norfund with another 15%, Wärtsilä with 13%, and the International Finance Corporation (IFC) holding the remaining 10%.
In 2015, Actis Capital, which was previously a significant stakeholder in Tsavo Power Company, sold its shares to the CDC Group and Norfund for approximately $227 million.
Triumph Power Generating Company Ltd
Triumph Power Generating Company Ltd is an IPP located in Athi River, operating an 83 MW heavy fuel oil power plant.
The ownership of Triumph Power Generating Company is primarily held by the family of the late Abdirahman Haji Abass, a prominent Mombasa businessman.
The shareholding structure includes Mohamed Anwar Abdirahman Haji Abass and Ahmed Rufa Abdirahman Haji Abass, each holding 10 shares, while Triumph Group Limited holds over 99% of the company with 28,519,930 shares.
Triumph Group Limited is co-owned by Nihad Fauzi and the estate of Abdirahman Haji Abass.
Thika Power Ltd
Thika Power Limited operates an 87 MW thermal power plant located in Thika.
The plant, which was commissioned in 2013, utilizes five heavy fuel oil generators and a steam turbine, providing electricity primarily to Kenya Power and Light Company (KPLC) under a 20-year power purchase agreement.
The ownership structure of Thika Power has undergone changes over the years.
Initially, it was predominantly owned by Melec PowerGen (BVI), a subsidiary of the Matelec Group from Lebanon, which held 90% of the shares.
The remaining 10% was owned by Narendrabhai Bhailalbhai Patel, a local investor.
In June 2021, AIF Thika Power Holding LLP acquired 100% of Thika Power Limited and its associated services company.
AIF Holdings is managed by Africa Infrastructure Fund I K/S, a Danish fund manager.
Lake Turkana Wind Power
Lake Turkana Wind Power (LTWP) operates the largest wind farm in Africa with a capacity of 310 MW.
Located in Marsabit County, the project consists of 365 wind turbines, each with a capacity of 850 kW, and it provides approximately 17% of Kenya’s installed power capacity.
The energy produced is sold to Kenya Power under a 20-year power purchase agreement.
The ownership of LTWP is shared among several stakeholders. Anergi Turkana Investments Limited and Milele Energy Ltd are key local players in the consortium.
Additionally, CFP UK Holdings Limited, which is managed by BlackRock Alternatives, holds a significant stake in the project.
Sandpiper Limited is also involved as an investor.
Vestas Eastern Africa Limited was previously a stakeholder but sold its shares in early 2024.
Furthermore, the Finnish Fund for Industrial Cooperation (Finnfund) was involved in the project but divested its stake to Climate Finance Partnership in March 2023.
OrPower 4 Inc
OrPower 4 Inc. is an IPP based in Kenya, primarily involved in geothermal energy generation.
The company operates the Olkaria III geothermal power plant, which has a capacity of 120 MW and is a significant contributor to Kenya’s energy supply.
OrPower 4 Inc. is a wholly owned subsidiary of Ormat Technologies, Inc., an American company founded by Yehudit (Dita) Bronicki, an Israeli national.
