Chase Bank secures Sh3bn loan for green energy projects

Chase Bank has secured a Sh3 billion loan from the Global Climate Partnership Fund (GCPF) for environmental friendly energy projects.

The eight-year loan, which has the option of rising to Sh4.5 billion, will be used for small-scale renewable energy projects that are now popular as corporates look for alternatives to expensive power.

Chase Bank said it had several high potential projects lined up and will start to disburse financing before the end of the month.

“Green energy lending is a key strategic focus for Chase Bank,” said the bank chief executive Paul Njaga.

This is the second such deal the bank has signed with international development agencies in as many months, underlining the high supply of funds for green energy.

Chase Bank has signed a total of Sh6 billion from the two transactions following a Sh3 billion loan from French state fund AFD last month.

Other banks that have been given loans for on-lending to environmental-friendly energy projects include Commercial Bank of Africa which received Sh1.1 billion from AFD last month.

The loan, however, deepens Chase Bank’s reliance on long-term credit from development finance institutions to grow its loan book.

Early last month it received Sh5 billion from African Development Bank for lending to small and medium-sized enterprises, mainly those owned by youths.

READ: AfDB approves Sh5bn Chase Bank loan for SMEs

Some of the development partners have converted their debt into equity. DEG converted its debt to equity in 2013.

The bank is set to expand its ownership through a private placement to be concluded by end of the year, to shore up a capital base.

The private placement follows a rights issue conducted earlier in the year, its third cash call in as many years. It also raised Sh4.8 billion through a bond issued in June this year.