EIB agrees to finance construction and operation of new solar plants in Kenya
The new Radiant and Eldosol projects are amongst the first to generate utility-scale solar power in East Africa.
The European Investment Bank and FMO, the Dutch entrepreneurial development bank, have agreed to finance the construction and operation of two new solar photovoltaic plants in Kenya.
EIB and FMO will each provide USD 53 million for the two projects, with the remainder of the USD 147 million total project cost provided by the project promoters Frontier Energy, David Langat, Chairman of the DL Group of Companies and Ayaz Merali, Managing Director of Paramount Bank.
The new Radiant and Eldosol projects are amongst the first to generate utility-scale solar power in East Africa. The two schemes will diversify Kenya’s electricity supply away from both rain-dependent hydro and fossil fuels, contribute to improving grid stability in Western Kenya and cater for expected increased in energy use in the coming years.
“As world leaders meet in New York to discuss future plans to save our planet, Kenya with EU support, is leading the way with visionary climate action. These two new solar schemes funded by the European Investment Bank, Dutch Development Bank FMO and Frontier Energy from Denmark will provide clean energy for Kenya and demonstrate direct benefits of the close partnership between Kenya and the European Union,” said European Union Ambassador, Simon Mordue.
Successful completion of non-recourse project financing for the two solar projects, commercial lending that based on project proceeds, demonstrates the strong investment potential for the future development of renewable energy by the private sector in East Africa.
“Expanding renewable energy is crucial to enable all Kenyans to access electricity. The European Investment Bank is pleased to support the Radiant and Eldosol solar projects and build on our track record of supporting expansion of wind, geothermal and solar power across Africa and around the world. Successful financial close of this project demonstrates the close cooperation of government, development partners and private sector investment and our shared goal of supporting national electrification. The Radiant and Eldosol solar projects demonstrate how visionary energy investment can accelerate social, economic and human development and show how Kenya is taking advantage of its rich renewable resources as a global leader in clean power generation.” said Catherine Collin, European Investment Bank Regional Representative for East Africa.
Linda Broekhuizen, Chief Investment Officer at FMO: “We are very pleased to have reached this milestone and to see that construction is now well underway. Both projects will increase the much-needed electricity generation capacity in Western Kenya and improve the region’s access to reliable energy. Being 100% green, the projects also fully align with our strategic goal to take climate action and further support the transition to a low-carbon system in Kenya. With these transactions, we further solidify our successful partnership with EIB and Frontier Energy and we are looking forward to continuing building on that going forward.”
“Having worked closely with the national and county governments, as well as lenders EIB and FMO, we are proud to see these two landmark renewable energy projects take-off for the benefit of Kenyans,” said Lars Jensen of Frontier Energy.
“What makes us even more proud is the level of community engagement that we have experienced where project benefits are shared firstly via local employment and secondly via support for projects identified by the community such as hospital equipment, improvement of local school facilities and boreholes,” added David Langat.
Project finance demonstrated investor confidence in East Africa clean energy
Successful completion of project financing for the two solar projects demonstrates the strong investment potential for the future development of renewable energy by the private sector in East Africa.
Supporting expansion of renewable energy in Kenya
The Kenyan government’s national electrification strategy aims to expand access to electricity to all citizens by 2022. This includes enabling support from development partners and private sector investment to extend electricity networks and use of on and off-grid solar standalone solar systems.
Harnessing solar energy
The new Radiant and Eldosol plants are being built close to Eldoret, 300km north-west of Nairobi.
The two adjacent sites will use 300,000 panels that track to harness the maximum amount of solar energy and will be connected to the Kenyan national energy grid.