IPFA East Africa: Nairobi: Is There a Future for IPPs in Kenya?

Independent Power Projects (IPPs) are typically implemented through Special Purpose Vehicles that justify the investment through future cash flows over a period of 20 years or more. Energy, the cost of energy for the end-user and access to energy are very sensitive topics for the community. The IPP ultimately has to survive several election cycles and the erratic shifts in the political climate. With a decrease in the cost of technology, potential over capacity and the impact of the Paris agreements, even the most promising projects can hit up against a wall and become stranded assets.

With support from the European Investment Bank (EIB) and Germany’s KfW, ATI has developed expertise and experience in the power sector and an understanding of the risks that IPPs face. IPPs in Kenya have a number of challenges, which mirrorss the situation in many other African countries. This event will give an update on the current situation and help developers, lenders and investors to adjust their strategies.

Topics for discussion:

1. Are Power Purchase Agreements (PPAs) in local currency realistic, and how can investors hedge their currency risk?
2. What are the solutions for the overcapacity (national and regional) and how does that affect the risk perception and bankability of IPPs?
3. How do IPPs perceive the recommendations of the Task Force of the Ministry of Energy, including the early termination of some PPAs?
4. The Kenyan regulator has asked KPLC to negotiate a change in tariffs for IPPs whose PPA had already been signed. Will this affect the financial close of other IPPs?
5. Is there still a future for unsolicited bids and single sourcing of IPPs?
6. What is the future of DGE (Deemed Generated Energy)?
7. Do weakened or inexistent letters of comfort / letters of support prevent IPPs from reaching financial close?
8. Does it still make sense to build coal fired power plants with a life expectancy of 45 years as the international pressure to reduce CO2 emissions increases?

Agenda

08.00am Registration

08.30 Welcome & Introduction

08.45 Panel Discussion:

Chair: Benjamin Mugisha, African Trade Insurance Agency

Speakers
• Bernard Osawa, Frontier Investment Management & KEPSA
• Chris Wright, Globeleq
• Daniel Kiptoo, Ministry of Energy
• Wanjau Wambugu, Sagalla City Limited

09.30am Q&A Session

09.45am Closing Remarks

09.50 IPFA Update

10.00am Networking kindly hosted by African Trade Insurance Agency 

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