Globeleq Announces Financial Closure for its 40 MW Solar Project in Kenya
The developer has entered into a power purchase agreement for 20 years with Kenya Power
Globeleq, an energy company focused on Africa has announced the financial closure of a 40 MW Malindi Solar photovoltaic project in Kenya. The company has also announced that it has started the construction of the project. The construction of the project may take around twelve months with the project expected to reach its commercial operation in mid-2020, as per Globeleq.
The project, which is expected to cost around $69 million is located in Langobaya, Malindi District, Kilifi County, about 120 km north-east of Mombasa, and is one of the first IPP-owned utility-scale solar power projects in Kenya to begin construction. Electricity generated from the project will be sold through a 20-year agreement to the national utility, Kenya Power.
The Africa Energy Development Corporation (AEDC) will hold 10% ownership of the project, and its partner, IDEA Power is expected to bring the project to completion by providing equity, project development, and construction management experience.
CDC, the U.K.’s development finance institution, as the mandated lead arranger, has sourced $52 million in debt financing including $20 million from DEG, the German development finance institution.
Paul Hanrahan, Globeleq’s CEO, said: “The attractive investment climate combined with strong local community support sets the stage for this important project as well as future investments in Kenya. We are extremely pleased to be making this investment into the Kenyan energy sector.’’
Zohrab Mawani, AEDC’s director, added: “AEDC is excited to have reached this significant milestone with the Malindi project. Working with our partners, we are very pleased to contribute to sustainable economic development in Kenya and look forward to continued growth in Sub Saharan Africa.”
Sterling and Wilson Solar will be contracted as the engineering, procurement, and construction company. According to Globeleq, the project has acquired land rights, and necessary environmental and local approvals have also been obtained. The project team has been conducting regular community consultations.
According to Mercom Research, in July 2018 – CDC – a development finance institution of the U.K. government – partnered with Globeleq to provide $66 million in debt financing to Malindi Solar Group, a solar project developer in Kenya. CDC will invest $50 million while Globeleq will provide $16 million for the development of a 52 MW solar PV project in Southeast Kenya. The long-term financing has been made available for 16 years. Globeleq will be 90% shareholder of the Malindi project and its partner AEDC will have the remaining 10%.
Shaurya is a staff reporter at MercomIndia.com with experience working in the Indian solar energy industry for the past four years in various roles. Prior to joining Mercom, Shaurya worked with a renewable energy developer and a consulting company. Shaurya holds a Bachelors Degree in Business Management from Lancaster University in the United Kingdom.