Norfund and The Nordic Development Fund are taking up a 14 per cent stake in responsAbility Renewable Energy Holding (rAREH) — a unit of Swiss fund responsAbility— that is developing 14 small power projects in Kenya, Uganda, Tanzania and Rwanda. Another investor in rAREH is German KfW.
European development finance institutions Norfund and The Nordic Development Fund have announced a Sh1.9 billion equity investment in a Swiss energy fund that carries out small-scale power projects in East Africa.
The two funds said they are taking up a 14 per cent stake in responsAbility Renewable Energy Holding (rAREH) — a unit of Swiss fund responsAbility— that is developing 14 small power projects in Kenya, Uganda, Tanzania and Rwanda. Another investor in rAREH is German KfW.
The investment will come as a boost for the development of rAREH’s small-scale community-backed hydropower projects, which include the 24.7MW Nyamindi Hydropower Cascade in Kirinyaga County and the 10MW Matiri Hydropower Project on the border of Embu and Thakara counties.
“The demand for energy is a key development challenge in Africa, and this project addresses the issue in a socially and environmentally responsible way,” said Nordic Development Fund managing director Pasi Hellman.
“We will help to implement the projects in the pipeline and act as a catalyser for further investments by other development finance institutions as well as private investors.”
The energy company was established in 2013, starting off with a seed capital of Sh2.6 billion ($25.5 million).
The Nordic Development Fund is a joint development financier of the five Nordic countries namely, Denmark, Iceland, Finland, Norway and Sweden. Norfund is Norway’s state-owned funder.
Both Kenyan and international firms have increasingly turned to small-scale hydropower projects to meet energy needs and as a source of income through sale of electricity to Kenya Power #ticker:KPLC.
The Kenya Tea Development Authority (KTDA) in 2010 set up a subsidiary to develop a series of small hydropower plants in a strategy to cut energy costs at its factories.
KTDA is developing seven plants with an installed capacity ranging from 1.1MW to 6.5MW, located in Kirinyaga, Murang’a, Meru, Kericho and Kisii counties.
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