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 US$53 million for the two projects, with the remainder of the US$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.
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.”
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.
“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.
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.