The Emerging Africa Infrastructure Fund (EAIF) will lend $35 million to the Kesses solar generation plant in Kenya.
The EAIF, which is part of the Private Infrastructure Development Fund Group (PIDG), will provide the loan over a 15-year term. The Kesses solar generation facility will be built near Eldoret in the Rift Valley region of Kenya.
Sine Zulu, the investment specialist with EAIF’s investment managers, Ninety One, said the Kesses plant would bring multiple benefits to Kenya’s economic development. “It will also play an important part in combating climate change and strengthening Kenya’s ability to recover from COVID-19. EAIF is now established as a lender of choice for renewable energy companies investing in Africa.”
Kenya has become the 9th African country where EAIF has supported renewable energy projects in recent years. The others are Burkina Faso, Cameroon, Côte d’Ivoire, Mali, Mozambique, Rwanda, Tanzania and Uganda.
The Kesses project will cost a total of $87m. The first part of the loan was disbursed to Alten Kenya Solarfarms BV (Alten), the Kenyan business of the Alten Group, in late December 2021.
Alten will sell all the Kesses facility’s output to national energy utility Kenya Power and Lighting Company (KPLC) on a 20-year take-or-pay Power Purchase Agreement. Construction of the plant has already commenced and it is expected to be completed later this year.
Standard Bank is a long-established lender to the EAIF and was the lead negotiator for financing Alten through $41m in debt comprising a term loan, VAT and Debt Service Reserve facility. Standard Bank is acting through its CIB and Stanbic Bank Kenya Limited divisions.
Sherrill Byrne, Executive Energy and Infrastructure Finance at Standard Bank, said the Kesses Project would allow them to provide continued support to the use of clean energy across the African continent, allowing for a more sustainable future. “This is the second project Standard Bank has funded with the Alten Group and we were pleased to be able to bring in and partner with EAIF for the funding.”
Eldoret has the largest population concentration in the Rift Valley area region. It is a centre for local government, higher education, business, and financial services, textile manufacturing, agribusiness, and sports tourism.
Byrne says building the Kesses plant will improve access to energy for thousands of people, support SDG 7, and create up to 400 construction jobs, with 15 permanent jobs during operations.
According to the World Bank, prior to Covid-19, the Kenyan economy grew at over 6% in 2018. Meeting the growing demand for energy is essential to sustaining economic progress and accelerating economic recovery from the pandemic.
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