Kenya Slashes Power Tariffs for State-Owned Solar Farm by Half
Posted on :Thursday , 12th April 2018
Energy Regulatory Commission Director-General Pavel Oimeke said “Kenya cut its fixed-price purchase contract for a state-owned 50-megawatt solar plant by half because the project was financed using concessional funds”
The East African nation, which has an electricity supply deficit, is boosting production from renewable sources including geothermal and wind as it cuts reliance on expensive diesel-powered plants.
The farm being developed by the Rural Electrification Authority, in the eastern Garissa region will be Kenya’s biggest yet. It will sell electricity at 5.49 US cents per kilowatt-hour, down from the 12 cents agreed on with Kenya Power & Lighting Ltd.
in September 2016. Kenya received $135.7 million from the Export-Import Bank of China, Oimeke said.
“REA is wholly owned by the government of Kenya, hence the government has guaranteed the loan. This means lower financing costs,” he said.
The solar farm should start supplying electricity to the national grid by the end of September, REA said last week. Its break-even point based on the previous tariff was expected after 17 years of operation. Kenya has a feed-in tariff of 12 cents for solar projects not exceeding 40 megawatts.
Other renewable energy projects planned in Kenya include:
• A 30-megawatt facility in Makindu by Rareh Icon, owned by Swiss private equity investor responsAbility
• A 45-megawatt plant in central Embu county
• Xago Africa’s 40-megawatt farm in the western county of Siaya
• The 70-megawatt Akiira Geothermal plant that’s owned by Nairobi-listed Centum Investments Ltd.
• Two solar projects totaling 80 megawatts in Eldoret, western Kenya.
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