Some 19 off-grid solar companies operating in Kenya have been offered access to KES500 million ($4.6 million) of credit as part of the $150 million Kenya Off-grid Solar Access Program (KOSAP) financed by the World Bank.
With the KOSAP initiative aiming to bring solar power to 250,000 off-grid Kenyan households and businesses by 2023 with a KES4.7 billion finance package, the initial KES500 million will be offered to private solar home system and clean cooking stove suppliers to enable them to buy stock and set up distribution networks in the 14 Kenyan counties targeted by the KOSAP scheme.
The funding round, which will include short-term loans and ‘results-based financing', will offer credit to 10 private companies which distribute individual solar home system panels across the 14 counties. Eligible suppliers include Ms Solibrium Ltd, the Ms Greenlight Planet Kenya operation of Chicago-based Greenlight, Ms Solar Integrated Appliances Ltd, and the Ms Azuri Technologies Ltd arm of Cambridge, U.K.-based Azuri. To qualify for the credit, the companies must offer fixed and portable systems which can power at least two fixed lights, a portable light, phone charging, and radio operation.
Nine clean cookstove companies – including Ms Rafadone Renewable Energy Ltd and New York-based Ms Biolite Holdings Ltd alongside Solar Integrated Appliances – which operate across eight of the 14 KOSAP counties, will also have access to the borrowing facility, to supply at least Tier 2 products as defined by ISO IWA standards.
The KOSAP program administered by Kenya's Ministry of Energy, public body the Rural Electrification and Renewable Energy Corp and state utility Kenya Power and Lighting (KPLC) aims to distribute 250,000 solar home systems and 150,000 clean cooking stoves in the off-grid counties as part of Nairobi's push for universal electricity access by 2022 and clean cooking facilities by 2028. The credit lines are being managed by Dutch development lender SNV Netherlands Development Organization and San Francisco-based private impact investor Sunfunder Inc.
The wider KOSAP initiative also aims to establish community mini-grids and solar water pumps in the 14 counties and will open up a further three more finance rounds for a total of KES1.2 billion of results-based finance and KES3 billion of short-term borrowing, structured in such a way as to enable private distributors to offer affordable repayment plans to customers.
Kenya was recently highlighted as one of three African nations leading the way in the effort to drive renewables adoption during the Covid-19 crisis. However, the COVID-19 energy sector response in Africa: A review of preliminary government interventions report by the Pan African University, also criticized a tendency among African governments to rely on donor aid to deploy clean energy, as in the KOSAP program.
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