- Solar prices have dropped 13% since 2018
- Increased demand and technological advances have contributed to a significant decrease in solar photovoltaic (PV) systems costs
Small and Medium businesses focusing on green projects can now draw from Sh750 million fund extended to the Co-operative Bank of Kenya by the African Guarantee Fund (AGF).
The guarantee facility will enable Co-op Bank to strengthen its commitment to financing small businesses and on the other to promote emerging corporates in Kenya that are involved in green energy and solar installation projects.
According to data from the International Renewable Energy Agency, increased demand and technological advances have contributed to a significant decrease in solar photovoltaic (PV) systems costs over the years.
Solar costs have fallen by over 80 per cent since 2010 while the Levelized cost of energy generated by large-scale solar plants is under Sh10/Kwh, compared to about Sh38/Kwh 10- years ago.
The figures further indicate that between 2018 and 2019 alone, the price of solar power fell by 13 per cent.
According to Co-op Bank director for Corporate and Institutional Banking Jacquelyne Waithaka, lenders regard financing of solar energy regards the kind of securities that customers offer as collateral for credit.
For instance, she said that solar panels are not preferred security because they cannot be easily liquidated in case of loan default.
''This partnership has created an instrument that overcomes this challenge, thereby giving the bank considerable ability to finance solar energy programs effectively,'' Waithaka said.
She added that the initiative will have a large positive impact on MSMEs involved in manufacturing, light industry and agro-processing by reducing the cost of doing business.
AGF Group Director of Business Development Franck Adjagba reaffirmed the firm's commitment to promoting sustainable economic growth in the country.
“Banks in Kenya are in dire need of risk-mitigating instruments to support their lending activities to SMEs. However, we should aim for economic growth without degrading the environment,''Adjagba said.
He added that sustainability improves the quality of our lives, protects the ecosystem and preserves natural resources for future generations.
Through this partnership, Co-op Bank will avail the opportunities to customers across the country.