The European Investment Bank (EIB) is finalising a Sh7.5 billion ($78 million) loan for construction of two solar power plants in Kenya.

The credit is evident that there is growing interest by global organisations in financing renewable projects in the east African country.

“The financing will be finalised soon, this year,” said EIB East Africa head Catherine Collin.

According to the bank, the funds will go to Radiant Energy and Eldosol Energy – co-owned by the same shareholders – Frontier Investment Management, Selenkei Investment Limited, Cedate Limited, Interpro International LLC and Paramount Bank.

European bank: solar investment

The solar plants, which have a capacity of 40MW each, will be connected to the national power grid and the electricity will cost Sh12.36 per unit ($0.12) under Kenya’s feed-in-tariff for solar power, the Business Daily reported.

The bank has estimated a total project cost of Sh17.6 billion ($177 million).

Therefore, the bank loan will be used towards the overall cost and the developers will raise the remaining Sh10.1 billion ($98 million).

This announcement comes shortly after Kenya’s President, Uhuru Kenyatta, said the private sector should be encouraged to participate in generation and transmission projects.

“Africa has huge potential for renewable power generation that the private sector should invest in,” Kenyatta said at a roundtable meeting in Addis Ababa last week.

The President highlighted that Kenya and other Africa countries are open for business, and welcomes partnerships that share the continent’s vision for growth.