June 13, 2018 / 4:53 AM / 2 months ago

UPDATE 2-Kenya's Centum to finalise power plant funding this year

(Adds details, background)

By George Obulutsa

NAIROBI, June 13 (Reuters) - Kenya’s Centum Investment Company said on Wednesday a $2 billion, 1,000 MW coal-fired power plant it has a stake in is expected to reach financial close this year.

The Amu Power consortium that includes Centum, won a contract to build the plant in Lamu. The project has attracted criticism from conservationists who say it will pollute the island, an ancient Swahili settlement on the coast that is a tourist destination and a U.N. World Heritage site.

“We have secured the debt. It is about $1.5 billion. The equity tranche is about $500 million, which is now fully funded,” Centum Chief Executive James Mworia told an investor briefing, adding that two additional steps were needed to get to financial close but did not specify what they were.

Amu Power signed an agreement last month with General Electric to design and build the plant, and the deal will also see GE, through its affiliates, acquire a stake in Amu.

Amu Power and Ministry of Energy officials say the technology General Electric will use is the most modern and will reduce the emissions from burning coal.

Centum said its pretax profit dropped 64 percent to 3.15 billion shillings ($31.16 million), hurt by lower property valuation gains, a delay in recognising proceeds from the sale of one of its businesses, and the broader economic downside pressures in Kenya last year.

Earnings from Centum’s sale of GenAfrica Asset Managers, whose transactions were signed in the year to end-March, had not been finalised by March 31 and will be reflected in the financial year to end-March 2019.

Its performance for the year was also affected by a prolonged election period in Kenya, slowing private sector credit growth and the impact of drought, it said in a statement.

The firm, which invests in listed firms and private companies from drinks makers to property developers, said net asset value per share, a key measure of performance for investment firms, rose to 73.2 shillings from 67.3 shillings the previous year.

Its shares were trading flat at 38.00 shillings on the Nairobi Securities Exchange at 1007 GMT, representing a discount when compared with its net asset value. ($1 = 101.1000 Kenyan shillings) (Additional reporting by Duncan Miriri; Editing by Omar Mohammed, Maggie Fick and David Evans)

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