The Co-operative Bank of Kenya (CBK), a Nairobi-based financial institution, is launching a new range of bank loans for Kenyan small and medium-sized enterprises (SMEs) operating in the solar energy sector. It includes upselling business solutions, counterparty onboarding opportunities, growing trade commissions, and integrating new package accounts for micro, small, and medium-sized enterprises (MSMEs).
The launch of these financing options for Kenyan SMEs involved in solar energy was made possible by the $ 7.5 million guarantee facility provided to CBK by the African Guarantee Fund (AGF). “Banks in Kenya urgently need risk mitigation instruments to support their SME lending activities. However, we must aim for economic growth without degrading the environment. Sustainability improves the quality of our lives, protects our ecosystem and preserves natural resources for future generations. Our partnership with the Cooperative Bank now reflects our commitment to increasing the financing of green businesses ”, says Franck Adjagba, Director of Business Development at AGF.
Kenya relies on solar power for universal access to electricity by the end of 2022
Kenya is aiming for universal access to electricity by the end of 2022, up from 75% currently. Photovoltaic mini-grids are among the options being considered to provide electricity to rural communities that house a large part of the population, but are too remote to be electrified through the national grid.
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The new financing arrangements for green SMEs offered by CBK and the evolution of international solar costs will allow Kenya, the largest economy in East Africa, to move forward towards its energy ambitions. According to the International Renewable Energy Agency (Irena), growing demand and technological advances have contributed to a significant drop in the cost of solar photovoltaic systems over the years. Solar costs have fallen by more than 80% since 2010, while the discounted cost of energy generated by large-scale solar power plants is less than $ 0.09 per kWh, or Kshs 10 per kWh, compared to around Kshs 38 per kWh ten years ago. According to the same source, between 2018 and 2019 alone, the price of solar energy fell by 13%.