AFD, CBA sign Kshs 1.12 billion credit line for green energy projects

AgenceFrançaise de Développement (AFD) and Commercial Bank of AfricaLtd (CBA) have today signed a credit line valued at 10 Million Euros (approximately KShs1.12 Billion) to finance Green Energy Projects in Kenya.

AFD was represented by the Director East Africa Regional OfficeMr Boudot, while CBA was represented by the Group Managing Director, MrIsaac Awuondo. The ceremony was also witnessed by the French Ambassador to Kenya, H.E. Rémi Maréchaux.

The credit line has been availed to CBA for onward lending to businesses that wish to investin renewable energy technologies projects (small hydro, biomass, biogas, solar,geothermal)as well as energy efficiency measures. This is a first step and the committed amount can be increased based on CBA appetite to finance Green Energy Projects in Kenya.

The Green Energy Line of Credit which is one of the components of the large regional programme called “SUNREF: Sustainable Use of Natural Resources and Energy Finance” in order to promote financing of renewable energy & energy efficiency projects in East Africa through local banking system”.

The credit line also comes with a technical assistance program, funded by the Africa Infrastructure Trust Fund of the European Union, which will be managed by Kenya Association of Manufacturers.

This will help the bank improve its knowledge on lending to and involvement in sustainable energy projects. In addition, Kenya Association of Manufactures will assist the projects sponsors on feasibility studies and technical support.

“This technical and financial offer is therefore particularly important to bringing additional solutions to achieve the diversification of energy resources in the East African region and help the region to transition towards sustainable energy solutions that are technically, economically and financially viable” stated Mr Boudot of AFD.

France, through AFD, is a key partner of Kenya in the energy sector and intervenes in all sub-sectors, i.e. generation, transmission, distribution and demand-side management.

“Business owners are becoming increasingly aware of their responsibility in running sustainable operations. The challenge for them arises when they consider the kind of investment they have to make to honour this responsibility and this partnership will make it easier for them to achieve their ambition for sustainable energy solutions,” Mr Awuondo said at the signing ceremony.

He added that the global push for the adoption of renewable energy will encourage businesses in Kenya to opt for naturally available sources of energy – such as wind and solar – which are readily available but greatly underutilized in the region. AFD will also develop this financial scheme in Tanzania and Uganda.