The European Investment Bank will offer a Sh7.5 billion loan this year for construction of two solar power plants, underlining the growing interest by global organisations in financing Kenyan green projects.
The bank said the €60 million (Sh7.5 billion) credit line would go to Radiant Energy and Eldosol Energy, which are owned by same developers and whose solar projects are located next to each other in Eldoret. The two solar parks have a capacity of 40 megawatts each.
“The financing will be finalised soon, this year,” said EIB East Africa head Catherine Collin.
The solar plants will be connected to the national power grid and the electricity will cost Sh12.36 per unit ($0.12) under Kenya’s feed-in-tariff for solar power.
The EIB records indicate construction of the two solar farms will cost Sh17.6 billion (€140 million).
This means the bank’s Sh7.5 billion loan will cover only a fraction of the expenses, and the developers will raise the remaining Sh10.1 billion through other avenues, including equity.
Radiant and Eldosol are owned by the same shareholders, including Danish firm DI Frontier Markets, Selenkei Investment and Cedate Ltd.
The loan offer comes after the companies applied for the funding and was approved by the board of the European Investment Bank in 2016.
Currently, Strathmore University in Nairobi is the only institution that has connected its 0.6-megawatt solar power plant to the national grid.