CDC, a UK government development finance institution, alongside its partner, Globeleq, announced a $66 million debt investment in Malindi Solar Group, to build a 52MWp solar photovoltaic power plant in South-East Kenya.
The 16-year financing will provide much-needed power in the Malindi area, which currently struggles with regular power shortages and relies largely on expensive thermal plants.
Globeleq, CDC’s majority-owned independent power producer solely focused on building power generation in Africa, is the sponsor of the project. The company is working with its partners Africa Energy Development Corporation (AEDC) and IDEA Power to commence construction in the coming months.
CDC project invested in creating jobs
CDC has invested $50 million and Globeleq $16 million to bring clean power and jobs to the Malindi region, where the project is on track to be the first of four utility-scale solar power plants in Kenya to begin construction. Globeleq will be the 90% shareholder of the Malindi project, with its partner AEDC, the originator of the project, holding the remaining 10%.
Welcoming the investment, CDC’s chief executive, Nick O’Donohoe, said: “Power infrastructure is vital for Africa’s economic growth and for the millions of individuals, families, and businesses who struggle to access the electricity they need. Our investment will bring clean energy and jobs to a region of Kenya that struggles to reach its potential because of energy shortages.”
Globeleq’s CEO, Paul Hanrahan, added: “Globeleq has been involved in the Kenyan power sector for many years. Obtaining CDC’s support to help the project move forward is essential in order to supply 52MWp of clean, renewable power to the grid and support the Kenyan government’s targets to build new generation.”
Zohreb Mawani, AEDC’s Director continued: “AEDC has been working for several years to bring the Malindi project to fruition. We are very pleased to have it reach this stage and are working closely with our experienced partners, Globeleq and CDC. We look forward to continuing our successes on the Malindi project and many more projects in sub-Saharan Africa.”
Increasing grid capacity
Kenya’s per capita electricity consumption is well below the sub-Saharan average and 44% below the level that would be expected for its level of GDP per capita. Located in a region where load shedding is widespread and power demand is increasing, it is expected most of the generation will be consumed locally.
The Malindi plant will provide 52MWp of clean generation capacity to the Kenyan grid.
It is estimated that the power generated will support the creation of jobs through direct employment and indirect job creation due to a more consistent supply of electricity. Read more: KETRACO seeks works to construct transmission lines
“This investment is a first for CDC’s Project Finance team – the first loan agreement as a sole lender; and the team’s first direct debt deal in Kenya. It’s a great example of CDC’s ability to assess and make quick key decisions as a lender to a project and is a testimony to Globeleq and MSG’s strong development skills,” added the CDC chief executive.