Henry Maina Kanyua and his wife Faith Nzilani Maingi are set to own Kenya’s first mini solar-to-grid electricity generating station after successful fundraising that will provide all resources needed to link the Nyeri-based project to the Kenya Power distribution lines.
The family has teamed up with investor Marco Borero to form a special purpose vehicle (SPV) known as Marco Borero Company Limited which has raised Sh37.5 million in equity investment from the Renewable Energy Performance Platform (REPP).
REPP is a UK government-funded programme supporting the growth of renewable energy that generate up to 25MW.
Kanyua confirmed that the company has already signed a power purchase agreement (PPA) with Kenya Power for 1.5MW.
“Our expected date of delivery is the last quarter of 2020. We are set to achieve this. The grid line is right in the site meaning minimum transmission costs,” said Kanyua in one of the briefs seen by the FinancialDay.
“REPP came in at the right time, and I’m sure without them Marco Borero would have challenges meeting the project’s deadline later this year. When REPP came on board they not only injected fresh equity, but also a fresh management style due to their experience. Now are able to achieve financial close together,” said Kanyua, Chairman, Marco Borero Company Limited.
The Nyeri project is one of the many solar generation projects which are part of the Kenya government’s least-cost power development plan of 2017-2037.
Others are; Strathmore (0.25mw), Garissa (50mw), Kopere (40mw), Alten, Malindi, Selenkei (120mw), Quaint Energy, Kenergy (50mw), Eldosol (40mw), Makindu Dafre Rareh (30mw), Gitaru solar (40mw), Hanan, Greenmillenia, Kensen (90mw), Sayor, Izera, Solar joule (30mw), Belgen, Tarita Green Energy Elgeyo (80mw), Tarita Green Energy Isiolo, Kengreen (50mw) and Asachi, Astonfield Sosian, Sunpower (81mw), all expected to be delivered by the year 2024.
A statement from REPP said the new funds for Nyeri project marks a notable turnaround for the first-time developer, which previously had to put its plans on hold whilst it raised the final tranche of equity.
It noted that the fundraising process, which was required to complete the project’s financing package, was proving challenging due to the comparatively small size of both the project and the funding amount required.
Although Marco Borero had earlier secured a Sh1.8 billion senior debt offer from the French Development Agency’s (AFD) SUNREF programme via the Co-operative Bank of Kenya to help fund construction, REPP’s equity participation brought much-needed comfort to lenders in order to complete the financing required to bring the project to fruition.
“REPP’s participation will unlock the senior debt facility and enable Astonfield Solar, a sub-Saharan Africa solar EPC contractor that has commissioned over 50 projects in East Africa, to ramp up construction, which has already commenced on site,” it noted.
Depending on how quickly the project is completed, the project may become the first privately owned solar plant to reach operation in Kenya, although a number of larger solar projects currently in construction are also vying for the title.
It is estimated that commercial operation will be achieved in approximately five months, ahead of the December longstop date established in the signed power purchase agreement.
