AP Moller acquires a Nairobi based thermal power plant

KENYA – AP Moller Capital, a Danish fund management company, has completed the acquisition of IberAfrica, a Nairobi based 52.5MW Independent Power Producer (IPP) from Naturgy.


AP Moller Capital, which focuses on infrastructure in growth markets, acquired the entire issued share capital of the 52.5 megawatt (MW) independent power producer (IPP) from Spanish power and gas utility firm Naturgy.


The Copenhagen-based firm had earlier set aside KSh20 billion (US$188.56m) for the acquisition deal and other investments in Kenya through its Africa Infrastructure Fund (AIF).


Lars Jakobsen, a senior partner at AP Moller Capital, said the acquisition provided the Danish firm with a platform to advance its “investment commitments” in Kenya, and laid out further plans to invest in greenfield (where it builds its own facilities from the ground up) and brownfield (where it buys or leases existing facilities) power and energy infrastructure assets.


The acquisition of the entire issued share capital of Iberafrica, one of Kenya’s leading IPPs, is part of A.P. Moller Capital’s efforts to invest in infrastructure assets including power and energy in Africa.


“Kenya is one of our focus countries with its sizeable, growing and well-diversified economy, as well as its strategic location in East Africa,” he said.


“The transaction represents AP Moller Capital’s first investment in Kenya, where we are planning to be an active long-term partner in the energy transformation, creating employment and driving foreign investments to advance the development and growth agenda.”


AIF is targeting infrastructure projects within energy and power sectors, including transmission, roads, rail and distribution centres. IberAfrica, whose oil-fired plant is based in Nairobi’s Industrial Area, sells electricity to Kenya Power under a long-term power purchase agreement that will expire in 2034.


Plans by AP Moller to acquire IberAfrica came to light in November last year, following a collapsed deal to purchase it by South Africa’s AEP Energy Africa for KSh6.2 billion (US$58.45m).


One of IberAfrica’s power purchase agreement lapsed in 2019, slashing by half the amount of power that it can feed to the grid.


IberAfrica posted revenue of KSh6 billion (US$56.57m) in the year to December 2017, with a net profit of KSh580 million (US$5.47m).


Located in Nairobi’s industrial area, Iberafrica has provided base load and reliable power to the grid since the start of its operations in 1997 and is operated by a highly experienced local management team with extensive knowledge of the Kenyan energy market.


Iberafrica sells electricity to the national utility Kenya Power and Lighting Company Plc under a long-term power purchase agreement.


Naturgy is a leading multinational group in the energy sector, a pioneer in the integration of gas and electricity in Spain and Latin America.

The company, as at end of 2019, has more than 18 million customers worldwide, an installed capacity of 16.8 GW and a diversified mix of power generation.


A.P. Moller Capital, founded in 2017, is an affiliate of A.P. Moller Holding and was established to manage stand-alone funds focusing on infrastructure in growth markets.

A.P. Moller Capital launched its first fund, The Africa Infrastructure Fund, in August 2017 to invest in infrastructure assets on the African continent with a focus on energy and transportation.

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