Kenya has partnered with the World Bank for a Sh15 billion investment under the Kenya Off-Grid Solar Access Project, President Uhuru Kenyatta said on Tuesday.
The initiative seeks to provide energy to 250,000 households and more than 800 public facilities in 14 counties.
“To achieve our electrification programme through off-grid solutions, my administration recognises the importance of partnering with the private sector,” he said at the opening of the 6th convention of the Off-Grid Solar Industry Forum held in Nairobi .
Investors were told to tap into off-grid solar to boost the country’s agriculture productivity.
This, as revenues from the off-grid solar industry continue to increase rapidly, growing 30 per cent annually.
“The transformation that the private sector drove in off-grid lighting and household energy now beckons in agriculture,” International Finance Corporation Regional Director for Eastern Africa Jumoke Jagun-Dokunmu said.
The 2020 Off-Grid Solar Market Trends Report by the World Bank shows firms are shifting towards larger, higher-margin solar home system sales in response to growing consumer demand for appliances and back-up systems.
“Agriculture sustains the livelihoods of more than 50 per cent of the population in Africa. We now see the emergence of a new generation of productive-use solar products that can directly stimulate socio-economic development,” Dokunmu said.
He added that solar irrigation pumps and refrigeration offer one such game-changing opportunity, especially given that for every 10 per cent increase in farm yield, there is an estimated seven per cent reduction in poverty.
The report shows that the sector would need an additional boost of up to $11 billion (Sh1.1 trillion) in financing globally.
This means the off-grid solar industry would need to grow at an accelerated rate of 13 per cent, with up to $7.7 billion (Sh770 billion) in external investment to companies and up to $3.4 billion (Sh340 billion) of public funding to bridge the affordability gap.
“Only by crowding in commercial finance at scale can we reach the target of achieving universal access by 2030,” senior director Global Financial Institutions Group for IFC Paulo de Bolle said.
He added that the financier was eager to work with local bank partners in the more mature off-grid markets where commercial debt can drive the next stage of market growth.
World Bank’s director for Kenya Carlos Felipe Jaramillo lauded the country for emerging as a leader in renewable energy.
He said demand for financing by governments for solar especially by Kenya has been growing over the past few years, with the state collaborating with private sector players to provide electrification in remote areas.
“We are now planning to address the emerging financing needs for off-grid solar electrification projects,” he said.
