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Thika IPP
Environmental & Social Review Summary

This Environmental and Social Review Summary is prepared and distributed in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental and Social Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.
Project number 29801
Country
Kenya
RegionSub-Saharan Africa
SectorHeavy Fuel Oil - Thermal Power Generation
Department
Company nameThika Power Limited
Environmental category:A
StatusActive
Date ESRS disclosedSeptember 30, 2011
Previous EventsInvested: October 25, 2012
Signed: May 24, 2012
Approved: December 15, 2011
View Summary of Proposed Investment (SPI), click here

OverviewCategory &

Applicable Standards
Key Issues

& Mitigation
Community/

Engagements
Availability

of Full

Documentation

Overview of IFC's scope of review
IFC’s review of the project included:

A site visit including discussions with representatives from the Company, KPLC, IFC’s Industry Specialist, the Independent Engineer appointed by the various lenders whose Terms of Reference included a review of environmental and social issues
Discussions with the environmental and social specialists from the other lenders including the World Bank, African Development Bank and Absa
A review of the two separate environmental and social assessments undertaken for the project and the report compiled by the Independent Engineer
Project description
The project involves the design, construction and operation of an 87 megawatt (“MW”) heavy fuel oil power plant (‘the project”) located 5 km from the town Thika which is some 38 km north-east of Nairobi, the capital city of Kenya. Electricity generated by the project will be supplied to the Kenya Power and Lighting Company (“KPLC”), the national transmission and distribution company. The project is one of 3 Independent Power Projects (“IPPs”) for which KPLC sought Expressions of Interests in June 2009 and have been awarded based on a completive bidding process. The IPPs are expected to generate 60-80 MW each using heavy fuel oils (“HFO”) as the fuel source.
The project is being developed by Thika Power (hereafter referred to the “Company “or “Thika Power”). Thika Power is a special purposes company registered in Kenya and wholly owned by Melec PowerGen (BVI), which is part of the Matelec Group of Companies (Lebanon). Construction commenced in June 2011 and is currently limited to earthworks. Commissioning of the project is expected in early 2013.

The project site was acquired by KPLC and will be leased to Thika Power. Adjacent to the site which occupies some 4 ha, KPLC are constructing a 132 kV substation which is similarly some 4 ha in extent. The project will consist of a simple cycle power block with five engine powered generator sets, and one steam turbine. The engines will have a combined generation capacity of 80 MW, while the waste heat from the exhaust gases emitted from the engine-generator sets will be recovered to generate steam for the turbine. The latter will improve the project’s efficiency by generating an additional 7 MW. All electricity generated by the project will be fed into the adjacent KPLC substation. The national Energy Regulator has approved a Power Purchasing Agreement (“PPA”) between Thika Power and KPLC which will come into effect on the first day of operations and extend for a period of 20 years.

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