Mauritius Commercial Bank led $400m loan for Karpowership

Mauritius Commercial Bank said it led the raising of a $400 million syndicated loan for the African unit of Karpowership, the world’s biggest provider of ship-mounted electricity plants.

Mauritius’s biggest lender acted as lead arranger and account bank for the facility, which has a five-year term and is based on the Turkish company’s power-purchase agreements with the utilities of African nations, it said in a statement on its website. It will use the loan, which can be increased, for liquidity management by Karpowership’s Sea World Energy Holdings unit.

The facility represents an expansion of MCB’s bid to win business across Africa and taps into a surging demand for energy on the continent. Karpowership provides ship-mounted gas and heavy fuel oil-fired power plants that can be moored in harbours, with the electricity being fed into national grids on short-term contracts.

“The demand for power on the African continent is enormous,” Naginlal Modi, executive vice president for power and infrastructure financing at MCB, said in an interview on Thursday. “The shortage in power supply is huge and this would require massive investments.”

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For MCB, the deal represents one of the biggest syndicated loans it has completed. It’s the biggest participant in the loan, with Ecobank Transnational , AfrAsia Bank and Federated Hermes also participating, according to Modi.

Part of the MCB Group, the bank generated 64% of it profit from the continent and related deals in the year through June, reflecting its strategy to seek growth in the region and mainland Africa.

Sea World can borrow more money using the structure of the syndicated loan and has already submitted the legal documentation, Modi said.

“You have an existing pool of lenders that cover the business intimately and can easily upsize going forward,” he said.

Karpowership operates a fleet of 40 vessels with a generation capacity of 8 000 megawatts in 14 countries across three continents, MCB said in the statement.

The Turkish company has supplied power to 11 African nations ranging from Gabon to Sierra Leone and Mozambique, it said on its website. A series of legal challenges filed by environmental activist groups thwarted plans to supply power to South Africa.

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