The project will be developed by Thika Power Ltd. (the “Company” or “Thika Power”), a special purpose vehicle registered under the laws of Kenya, which is 90% owned by Melec PowerGen (BVI), (“Melec”) with the remaining 10% owned by Africa Energy Resources Pte. Ltd.

Melec PowerGen, an international company incorporated in the British Virgin Islands, is part of the Matelec Group of Companies (“Matelec”). Matelec was formed in Lebanon in 1975 for the manufacturing of electrical products such as transformers, switchboards, control panels and packaged substations. Matelec group is one of the few manufacturers of transformers in the Arab countries and a leader in its line of business at a regional level. The share ownerships of Melec and Matelec are privately owned by common shareholders.

The total Project cost is estimated at €112 million. The proposed IFC investment is €28 million A loan for IFC’s own account.

37.41 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	37.41
Equity

* These investment figures are indicative

The Project site is a Greenfield site adjacent to and west of the Nairobi-Thika highway, approximately 30 km north of Nairobi city centre and 5 km southwest of Thika Town. The land previously was used for growing coffee. Key features of the area include: (i) A highway (a four-lane dual superhighway) that is nearly adjacent to the Project; (ii) the adjacent coffee farm, from which the land for the project was purchased; (iii) an informal residential housing area, Witeithie Estate, that is southeast of the site, across the Nairobi-Thika highway; and (iv) Mang’u High School, a 1,500-pupil boys’ boarding school to the south of the site.

The Project will be a significant step in assisting Kenya to achieve a more diversified energy mix and some stability to its power generation. It will contribute to the country''s installed capacity in thermal generation as hydropower is frequently negatively impacted by drought.

In addition, the Project presents a less expensive alternative to investments in emergency diesel fired plant and a strategic solution to Kenya''s medium term power needs.

The World Bank''s recently completed Africa Infrastructure Country Diagnostic found that the lack of adequate and reliable electricity supply is Kenya''s largest infrastructure challenge and a key constraint to economic growth (contributing to economic losses of up to 2% of GDP).

IFC will be providing much needed and critical long term funding in an environment where such funding tenor is scarce. IFC''s long term funding will facilitate the financial stability of the Project over the life of the PPA.

The key environmental and social issues relate to air quality, noise, occupational health and safety, community health and safety, traffic management, hazardous material and waste management, and access to water during operations. The Company has presented information on its planned policies and practices that will address environmental and social risks and impacts to ensure that the proposed project will, upon implementation of specific additional agreed measures, comply with host country laws and regulations and IFC’s Performance Standards on Social and Environment Sustainability. The Project is one component of a larger World Bank lending program to KPLC that will support the establishment of the three IPPs. The World Bank has categorized these IPPs collectively as Category “A” projects. The IFC-supported project related to Thika Power will have limited environmental and social impacts and can be managed via the existing project design, or via readily available mitigation measures However, despite the limited impacts, the Project has been categorized as “A” to maintain consistency with the World Bank’s categorization.