KIPETO WIND FARM ENTERS INTO INNOVATIVE LOAN AGREEMENT TO FUND BIODIVERSITY
BTE Renewables (BTE), which is an Actis company, alongside Craftskills Limited and The Nature Conservancy (TNC) have arranged a pioneering loan agreement for the Kipeto Wind Power Project (Kipeto), in Kenya. Sourced from TNC and private impact investors, the $10m loan will facilitate funding, over the life of the project, towards implementing local human-wildlife initiatives in the areas surrounding the wind project. The $10 million loan helps bring together multiple parties in the interest of advancing conservation and demonstrating new models of funding.
Kipeto reached full commercial operations in July 2021 and is supplying 100MW of additional power to the Kenya national grid, making this project the second largest wind power project in Kenya and providing clean power to approximately 250,000 households.
Located in Kajiado county, 45 km away from Kenya’s capital, Nairobi, Kipeto is implementing an ambitious biodiversity action plan (BAP), which comprises close collaboration with the local community to protect the surrounding flora and fauna. The BAP was developed in consultation with various nature and wildlife conservation experts and includes a number of projects to improve the livelihoods of the community through local job creation and building improved predator-proof animal enclosures for local farmers. Simultaneously, the BAP aims to ensure the preservation of endangered species of vultures by undertaking activities such as enhanced monitoring and carcass clearance while implementing shutdown on demand and raptor rescue protocols.
BTE and TNC designed the investment via a $10 million fixed-rate mezzanine loan to the project, alongside a commitment by the project to provide annual funding for critical conservation initiatives throughout the life of the wind power project. The use of this funding is governed by the biodiversity subcommittee of Kipeto’s Board, which comprises leading independent local and international avifauna organisations. In connection with the loan, TNC has joined Kipeto’s biodiversity committee and will provide technical assistance for the committee’s implementation of the BAP.
It is significant to note that the BAP includes both on-site mitigation measures and off-site vulture conservation interventions, including radio tracking and awareness programmes within communities, to decrease human-wildlife conflict, such as poisoning. The shutdown-on-demand and carcass removal activities, relate to on-site avoidance interventions.
Lisa Pinsley, Head of Africa at Actis, commented: “We are proud for our portfolio company BTE Renewables and the landmark Kipeto project to be entering into this engagement with TNC, utilizing the creativity and expertise at both organizations to come together and support sustainable infrastructure development.”
Nikhath Zigmund, Business Development Director at BTE commented: “This collaboration between BTE and TNC demonstrates the opportunities for private capital to be deployed in novel ways to address conservation challenges. We look forward to working closely with TNC on the Kipeto biodiversity committee to support the needs of the local community and also honour our commitment to the net gain of critically endangered vultures.”
Charlotte Kaiser, Managing Director of The Nature Conservancy’s NatureVest impact investing team commented: “With the twin crises of climate change and biodiversity loss, we must find every available opportunity to invest in ways that benefit nature and people together. Thanks to the commitment of all of Kipeto’s partners and the investors funding this loan, we are able to support biodiversity and communities while also investing in the renewable energy infrastructure that is a critical part of the fight against climate change.”
Notes to Editors:
BTE Renewables (formerly BioTherm Energy) has been operating in Africa since 2003 and is positioned as a leading Pan-African renewable power developer with nearly 400 MW of wind and solar projects in operation in South Africa and Kenya. The company is owned by Actis, the world’s leading emerging markets investor, following an acquisition in 2019.
The Kipeto Wind Power Project reached financial close in December of 2018 and reached commercial operation in July 2021. It has a 20 year Power Purchase Agreement with KPLC, and consists of 60 wind turbines and 17km 220kV transmission line. The project is funded by equity from BTE Renewables (88%) and Kenyan-owned Craftskills Limited (12%) alongside senior debt from the U.S. International Development Finance Corporation (“DFC”), the US Government’s development finance institution, and African Trade Insurance Agency (“ATI”) is providing an on-demand insurance product for the project.
Actis, is a leading global investor in sustainable infrastructure. Actis has raised US $24 billion since inception and operates with sustainability at its core. Actis believes Values Drive Value, through deep operational experience, on the ground presence and a value-led approach, Actis delivers competitive returns for its institutional investors and measurable positive impact for the countries, cities and communities in which it invests.
Actis is a signatory to the United Nations backed Principles for Responsible Investment (UNPRI), an investor initiative developed by the UNEP FI and the UN Global Compact. The firm has consistently been awarded the highest rating score in the UN Principles for Responsible Investment (PRI) independent assessment.
Craftskills is a fully Kenyan-owned wind turbine company founded in 2008. Its mission is to develop renewable power resources all over Africa for generation of electricity by applying best practice and making maximum use of resource capacities.
The Nature Conservancy is a global conservation organization dedicated to conserving the lands and waters on which all life depends. Guided by science, we create innovative, on-the-ground solutions to our world’s toughest challenges so that nature and people can thrive together. We are tackling climate change, conserving lands, waters and oceans at an unprecedented scale, providing food and water sustainably and helping make cities more sustainable. Working in 72 countries and territories: 38 by direct conservation impact and 34 through partners, we use a collaborative approach that engages local communities, governments, the private sector, and other partners. To learn more, visit www.nature.org or follow @nature_press on Twitter.