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Marco Borero, Kenya

REPP equity investment accelerates financial close for 1.5MW grid-connected solar PV plant in Kenya

A US$355,000 equity investment from REPP has breathed new life into a grid-connected solar PV plant in Kenya that required additional equity to fund construction, raising hopes of it reaching commercial operation by the end of the year.

Although developer Marco Borero* had earlier secured a US$1.8m senior debt offer from the French Development Agency’s (AFD) SUNREF programme via the Co-operative Bank of Kenya to help fund  construction of the 1.5MW plant, it had been unable to raise the final tranche of equity required to complete the financing package. This was due to the comparatively small size of both the project and the funding amount required. REPP’s equity participation brought much-needed comfort to lenders in order to complete the financing required to bring the project to fruition.

With REPP’s funding, Marco Borero is now expecting to reach financial close on the project within weeks, unlocking the senior debt facility that will accelerate construction at the site in Nyeri, which has already started.

Depending on how quickly the project is completed, the project may become the first privately owned solar plant to reach operation in Kenya, although a number of larger solar projects currently in construction are also vying for the title.

Once financial close has been reached Astonfield Solar, a sub-Saharan solar EPC contractor that has commissioned over 50 projects in East Africa, will build and operate the plant.

It is estimated that commercial operation will be achieved in approximately five months, ahead of the December longstop date established in the signed power purchase agreement (PPA) with offtaker Kenya Power and Lighting Company.

Once operational the solar plant will contribute towards Kenya’s NDC target to abate 30% of its greenhouse gas emissions by 2030. The project will also help build local capacity with the first-time developer, which has aspirations of developing a pipeline of renewable energy projects in the region.

* Marco Borero is an SPV set up by Kenyan nationals Henry Maina Kanyua and his wife, Faith Nzilani Maingi.

Funding structure

Contracted date: 9 April 2020

Lending type: Equity

REPP funding: US$355,000

REPP came in at the right time, and I'm sure without them Marco Borero would have challenges meeting the project's COD deadline later this year. When REPP came on board they not only injected fresh equity, but also a fresh management style due to their experience. Now are are able to achieve financial close together.
- Henry Maina Kanyua, Chairman, Marco Borero Company Limited