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Firm obtains Sh1.6bn SBM loan to connect homes with solar

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SBM Bank branch in Nairobi. FILE PHOTO | NMG

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Summary

  • SBM Bank Kenya has lent Sh1.6 billion to solar energy firm Bboxx that plans to connect 470,000 homes to the renewable energy source.
  • GuarantCo, a fund backed by the governments of UK, Switzerland and Australia among others, is guaranteeing Sh1.2 billion or 75 percent of the loans.

SBM Bank Kenya has lent Sh1.6 billion to solar energy firm Bboxx that plans to connect 470,000 homes to the renewable energy source.

GuarantCo, a fund backed by the governments of UK, Switzerland and Australia among others, is guaranteeing Sh1.2 billion or 75 percent of the loans.

This means that the fund will absorb up to three-quarters of potential defaults on the loans, giving the bank the confidence to disburse the credit facilities to Bboxx customers who are mostly low-income households without access to the national power grid.

“SBM Bank is elated to spur the growth of the energy sector in Kenya through partnerships with like-minded entities such as Bboxx and GuarantCo,” said Jotham Mutoka, SBM Bank Kenya’s deputy chief executive officer.

The funds will be used by Bboxx Kenya to purchase new inventory over the next two years including 89,600 solar home systems and essential appliances such as fridges and phones.

These are expected to serve 470,000 people, 80 per cent of whom are based in rural areas and the majority of whom currently use torches and other energy forms like kerosene as their main source of lighting.

Kenya’s electrification rate is estimated at around 70 per cent though there is some disparity between urban (90 per cent) and rural areas (60 per cent).

The Kenya National Electrification Strategy, developed in 2018, demonstrates the Government of Kenya’s commitment to scaling up off-grid electrification with ambitions to establish two million new connections by 2022, notably through solar home systems and mini-grids.

“We are delighted to partner with Bboxx and SBM Bank to make this solar home systems transaction happen to the benefit of people in Kenya,” said Emily Bushby, the chief operating officer of GuarantCo.

“This is our sixth deal and first off-grid solar project in Kenya. We are proud to support the Kenyan government in its ambition to grow its off-grid capabilities and improve affordable, clean energy access to local people while involving the private sector and provide local currency infrastructure project financing which is at the core of GuarantCo’s business.”

The project is expected to create an additional 100 long-term jobs at Bboxx Kenya. The company currently employs 300 workers.

“Over the past 12 months we have been working closely with GuarantCo and SBM to bring this partnership to fruition,” said Jeff Vanden Berghe, the managing director of Bboxx Kenya.

This marks Bboxx Kenya’s first local currency transaction, which allows us to bring more renewable, low-cost and safe energy to an extra 470,000 Kenyans.”