Around 60,000 people living in rural Kenya are set to gain first-time electricity access after REPP approved a US$3m results-based financing facility for this first-of-kind microgrid project.
Phase 2 of the scheme – which follows a successful four-grid pilot – will involve the installation of close to 100 ground-mounted microgrids that will supply clean energy to rural communities in the Kisii and Nyamira regions of south-western Kenya over the next two years.
Combined, the microgrids will provide up to 1MW of generating capacity. Electricity will be sold directly to local households and businesses by developer Powerhive East Africa Ltd on a prepayment basis. Each system will include batteries to offer reliable power to customers.
REPP’s financing facility will enable Powerhive to complete the successful roll-out of Phase 2 and grow to a sufficient scale to attract additional debt and equity finance, and continue building microgrids in Kenya.
Up until 2016, microgrids were not licensed but “tolerated” in Kenya. Powerhive broke new ground when it became the first private company to be licensed for developing microgrids. The success of the venture is expected to make it easier for other private developers to operate in Kenya and will assist in the creation of a sustainable business model.
Contracted date: 24 May 2018
Lending type: Results-based loan with convertible option
REPP funding: US$3,000,000
The REPP facility has been critical to unlocking the potential of microgrids for Powerhive in Kenya. In addition to providing equity investors with a framework to understand how Powerhive’s microgrid projects can be leveraged by project debt, it is also a great show of confidence in our data-driven platform, which we intend to deploy across Kenya and more broadly Africa in the future.- Christopher Hornor, Founder and CEO, Powerhive