The Commonwealth Development Corporation (CDC Group) is planning to invest $66m in the Malindi solar project. British Prime Minister of Foreign Affairs, Jeremy Hunt revealed the plans during his tour in Kenya.
Mr. Hunt announced a series of investments and said that the British government’s development finance agency will contribute US $50m while its partner, Globeleg, an independent power producer (IPP) the remaining $16m.
The funds will be a loan refundable over 16 years.
The project will be led by Malindi Solar Group, a company created ad hoc by Globeleq. The latter, 70% owned by CDC and 30% by Norfund, will build a 52 MWp solar park in Malindi.
The energy produced will be consumed by locals as the region is still facing load shedding. In Kenya solar utilization is mainly for photovoltaic (PV) systems, drying and water heating. The solar PV systems are used mainly for telecommunication, cathodic protection of pipelines, lighting and water pumping.
While a vibrant solar energy market has developed in Kenya over the years there still remains some barriers affecting full exploitation of solar energy resource such as high initial capital costs, low awareness of the potential opportunities and economic benefits offered by solar technologies, and a lack of adherence to system standards by suppliers.
The sale of electricity from the solar park will be made by the Kenya Power and Lighting Company (KPLC), which provides public electricity service in Kenya. KPLC has already signed a 20-year power purchase agreement (PPA) with Globeleq.
Construction of the solar project will also strengthens Globeleq’s presence in East Africa.