This archive report was first published on 17 November 2019.
Thermal power producer IberAfrica is up for sale again, with its owners seeking to sell it to a Danish firm, AP Moller Capital. The company operates a diesel power plant in Kenya and has a power purchase agreement (PPA) with Kenya Power, which will expire in 2034.
According to a notice from the Comesa Competition Commission, AP Moller Capital has applied to acquire IberAfrica through its Africa Infrastructure Fund (AIF) and has set aside Sh20 billion for the acquisition as well as other investments in Kenya.
The new plan to sell IberAfrica comes shortly after a similar deal with South Africa's AEP Energy Africa, which wanted to buy the power producer at Sh6.2 billion, collapsed. The companies had signed a sale agreement last year June but the deal failed to go through on time and on October 30, AEP Energy notified its shareholders that the period within which it had to conclude the deal had lapsed.
Delays from AEP Energy resulted in the owners of IberAfrica issuing a notice to the firm in March this year that it would terminate the agreement due to the long period it was taking to conclude.
AP Moller-backed African Infrastructure Fund says it is targeting infrastructure projects within energy and power, including transmission, as well as roads, rail, and distribution centres. Other key investors are Danish pension funds and have committed $1 billion (Sh100 billion).
IberAfrica owns a 52.5 megawatt oil-fired plant at Lunga Lunga Road, Industrial Area. It has a power purchase agreement (PPA) with Kenya Power which will expire in 2034, guaranteeing the AIF steady revenues for the next 15 years should the deal go through.
One of IberAfrica's PPAs lapsed this year, halving the amount of power that it can feed to the grid from 103.57MW. According to disclosures made while it sought approvals for the initial sale, IberAfrica reported a revenue of Sh6 billion in the year to December 2017 while its net profit was Sh580 million.
