Kenya primed for Sh11b renewable energy funding

Lagos-based infrastructure financier Africa Finance Corporation (AFC) is targeting Kenya with more than Sh11 billion in investments in renewable energy projects.

This is after the Italian development finance institution Cassa Depositi e Prestiti SpA (CDP) agreed to an initial Sh11.9 billion (100 million Euros) loan for AFC to facilitate investments in renewable power, energy efficient projects and climate-resilient infrastructure.

"CDP, with assets totalling over 400 billion euros (Sh47 trillion), is providing the bilateral loan to support AFC projects that are urgently needed to transform African infrastructure, to help combat and adapt to global warming as well as catalyse industrialisation, create jobs and reduce poverty," said AFC in a statement.

AFC President and Chief Executive Samaila Zubairu said recently the agreement with CDP marks the start of a mutually beneficial relationship.

"Access to funding from highly rated institutions like CDP helps us to further our commitment to investing in projects that combat climate change and develop the critical infrastructure required for Africa's economic growth while delivering reliably competitive investor returns," said Mr Zubairu.

AFC has invested over $10 billion (Sh1 trillion) in projects spanning 35 African countries over 15 years.

The entity draws capital from various investors and lenders, including international development finance institutions such as the German Development Bank (KfW), the India Exim Bank, and a syndicate of Germany's DEG, Netherland's FMO as well as France's Proparco.

AFC noted that the focus on sustainably reducing Africa's energy deficit led to an agreement by the fund last month to jointly acquire Lekela Power, the continent's biggest renewables independent power producer, with plans to double generation capacity within four years.

"AFC's approach to balancing the need for emissions reduction in Africa with critical development imperatives is set out in a recently published white paper titled Roadmap to Africa's COP: A Pragmatic Path to Net Zero," the fund noted.

CDP Head of International Cooperation and Development Finance Antonella Baldino said partnerships with major international institutions such as AFC are part of the strategy to scale up impact finance and accelerate the ecological transition in developing countries.

"It is in this spirit that we welcomed AFC's recent entry into the International Development Finance Club. By intensifying our commitment to Africa, this operation best places CDP as a partner of choice for regional and local development finance institutions," she added. [Moses Omusolo]

The latest development comes just weeks after another Africa-focused Pretoria-based asset manager Public Investment Corporation (PIC) committed a $100 million (Sh12 billion) equity investment in AFC.

Under the deal, State-owned PIC is expected to benefit from co-investment opportunities in AFC's project development initiatives in risk-mitigated projects on the continent.