Kenya is set to benefit from a Sh21 billion ($200 million) private equity fund established by the African Development Bank (AfDB) to finance development of renewable energy.
The African Renewable Energy Fund, which is headquartered in Nairobi, will invest in small and medium hydro, wind, geothermal, solar and biomass projects in the Sub Saharan region.
AfDB and its Sustainable Energy Fund for Africa are the fund’s lead sponsors with equity investment of $25 million and $25.5 million respectively. It was set up in March last year with an initial commitment of $100 million.
Other stakeholders of the fund are Global Environment Facility with a contribution of $4.5 million, European Investment Bank and the Global Energy Efficiency and Renewable Energy Fund.
“AfDB is pleased to see that the African Renewable Energy Fund is fully capitalised to deliver on its pan-African mandate. This is key for accelerating deployment of modern, clean and affordable energy in the continent,” said Mr Alex Rugamba, director of AfDB’s energy, environment and climate change department in a statement.
The fund will be managed by Mauritius-based Berkeley Energy Africa Ltd. It will target independent power producers (IPPs) with projects between five and 50 megawatts, where it will take a controlling stake.
The Berkeley team comprises, among others, Mr Eddy Njoroge, former chief executive officer of the Kenya Electricity Generating Company (KenGen) and who was recently appointed to the board of UK-owned independent power producer Globeleq.
The government plans to increase the installed power generating capacity by 5,000 megawatts by the end of next year.