Corporate News
UBA branch in Community Area, Nairobi. PHOTO | FILE
By SIMON CIURI
In Summary
- Kenya Power will use the funds to upgrade its power infrastructure in readiness to distribute the planned additional 5,000 megawatts (MW) expected to be generated by 2017.
- This is the first time UBA, whose parent firm is based in Nigeria, has loaned nearly Sh1 billion to a parastatal in Kenya.
United Bank of Africa (UBA), has given Kenya Power $10 million (Sh940 million), marking one of its largest deals in the lucrative corporate lending market.
Kenya Power said the borrowing is part of a syndicated loan
it took from multiple lenders in January. The total borrowing could not
be established by the time of going to press.
The company will use the funds to upgrade its power
infrastructure in readiness to distribute the planned additional 5,000
megawatts (MW) expected to be generated by 2017.
This is the first time UBA, whose parent firm is based in Nigeria, has loaned nearly Sh1 billion to a parastatal in Kenya.
“We remain committed to a continued relationship
with Kenya Power and other key players in the public sector to take on
similar or larger projects especially in energy and infrastructure
sector,” Isaac Mwige, the chief executive of UBA Kenya said in a
statement.
The bank has for the past five years been recording
losses since its entry into the Kenyan market, in what is seen as
difficulty in wresting market share from established players including
homegrown and foreign lenders.
UBA had a turnaround in the first quarter with net
profit of Sh2.9 million. This reversed the Sh50.9 million net loss it
made in the same quarter last year.
The bank’s loan book increased 92.8 per cent in the period to Sh1.5 billion compared to Sh805 million a year earlier.
UBA, which has a presence in 19 African
countries and operates branches in New York, France and London, recently
hired its first Kenyan chief executive officer.
Kenya Power said it will also use the funds to
replace its old lines with higher transmission capacity ones. It will
also use the cash to upgrade its existing substations, build 37 new ones
and install new equipment on the power grid.
“Timely completion of these capital intensive
projects is critical in ensuring long term viability of Kenya Power
business as well as in making the country an attractive investment
destination,” said Ben Chumo, the Kenya Power managing director.
Kenya Power is seeking to improve its power supply,
reduce breakdowns of its ageing infrastructure which has contributed to
frequent power outages, especially during heavy rains
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