Kenya Launches $47 Mn Off-Grid Solar Access Project

Kenya has launched a $47 million facility under the Off-Grid Solar Access Project aimed at the private sector to provide solar and clean cooking solutions

The government of Kenya has launched a $47 million (KSh 4.7 billion) facility under the Kenya-Off-Grid Solar Access Project (KOSAP) aimed at spurring the private sector to provide viable solar and clean cooking solutions to about 1.1 million people in marginalised regions.

The Results-Based Financing (RBF) and Debt Facilities under the KOSAP are financed by the World Bank and implemented by the Ministry of Energy alongside the Kenya Power and Lighting Company (KPLC) and the Rural Electrification and Renewable Energy Corporation (REREC).

“The country has made great strides in achieving connectivity with access to electricity standing at 75% through both grid and off-grid options. However, access to electricity is low in the 14 marginalised counties, which represent 72% of the country’s total land area and 20% of the population. The dispersed settlements in the marginalised counties make off-grid solutions the only viable alternative for access to electricity,” said Joseph Njoroge, Principal Secretary, Ministry of Energy.

The facilities are intended to ensure that counties that are not served by the grid and have been classified as marginalised by Commission of Revenue Allocation (CRA) are not left behind and receive access to energy through off-grid solutions. Through financing from the World Bank of $150 million, KOSAP seeks to overcome these challenges and establish viable off-grid solutions for areas that are too far for the national grid to be economical.

The project targets 277,000 households (approximately 1.3 million people from the 14 marginalised counties). This will be realised through the construction of about 151 mini-grids in the target counties as well as the installation of stand-alone solar systems under the financing launched. The project also targets replacing 380 diesel pumps with solar for drinking water and expects to facilitate the provision of 150,000 clean cooking stoves in West Pokot, Turkana, Marsabit, Samburu and Isiolo.

The RBF and Debt Facilities specifically aim to establish sustainable supply chains for marketing and sales of solar home systems in KOSAP counties. The Facilities are in three parts: $12 million Solar Service Providers Results-Based Financing (SSP RBF Facility), $30 million Solar Service Providers Debt Facility (SSP Debt Facility), and $5 million Clean Cooking Solutions Challenge Fund.

Under the KOSAP Solar Service Providers RBF, a total of $12 million in financing will be provided to compensate solar home systems service providers (SSPs) for the initial, incremental, and opportunity costs associated with an expansion of operations in the KOSAP Service Territories (KSTs). The aim will be to encourage the growth of emerging solar companies where possible and to set a foundation for established solar operators to access debt investments and further scale-up operations in these counties.

The $30 million SSP Debt Facility will enable private sector SSPs to borrow money for acquiring inventory to sell in KOSAP counties as well as to extend consumer financing to households to purchase the products, for instance through Pay-As-You-Go technology.