French group buys stake in Kenyan energy companies

French energy giant EDF has struck deals to buy stakes in off-grid focused energy firms Econet Energy Kenya and Bboxx Kenya, becoming the latest global firm to target local fast-growing off-grid energy market.

EDF said Thursday it has bought a 50 per cent stake in solar energy firm Econet Energy Kenya and a 23 per cent stake in off-grid energy company Bboxx Kenya. The financial terms were not disclosed.

Already present on the Kenyan market of solar irrigation pumps for small-holder farmers with its partner Sunculture, EDF said it will now extend its off-grid offer to the residential market and target to connect more than two million Kenyans to electricity by 2025.

"By partnering with Bboxx Kenya and Econet Energy Kenya, the EDF Group becomes a key player in the Kenyan market of low carbon energy solutions," said Béatrice Buffon, EDF Group senior executive vice-president in charge of international division in a statement.

"It also proves the relevance of our development model based on building long-term partnerships with local players around solutions tailored to the specific needs of each market."

The French group is present in 14 countries through a wide range of low-carbon energy solutions, from renewable generation to grids and energy services.

Buoyed by success of pioneer peers, more off-grid solar power start-ups are pouring into Kenya's rural areas offering pay-as-you-go kits in a race to claim customers who lack reliable access to electricity.

Venture capital funds have consequently been stepping up their investments in the clean and renewable energy space in Kenya.

This has coincided with the growth of the Kenyan solar kits market which has attracted multinationals like Indian firm Orb Energy and Germany-based Mobisol as well as local company M-Kopa.

The main challenge facing smaller companies, however is how to raise enough capital to supply the expensive solar kits in return for small upfront payments from customers.