Kenya’s 50MW Garissa Solar Park Finally Reaches Financial Close

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“I am very proud that the project has been successfully completed and is equipped with state-of-the-art equipment. We hope it will serve Kenya for the next 25 years,” says Zhang Jian, representative of CJIC in Kenya.

The Kenya Rural Electrification Authority has signed a 25-year Power Purchase Agreement (PPA) with Kenya Power (KPLC) but not before the tariff was re-negotiated.

Rural Electrification Authority (REA) had initially entered into a 25-year power purchase agreement (PPA) with Kenya Power at an initial feed-in tariff of Sh12 per kWh. At Sh12 per unit, the US 135.7 million solar project was expected to break even after 17 years of operation.

But the government later directed a cut in the tariff by more than half to Sh5.49 per kWh just months before the solar park started generating electricity at the end of 2018. In justifying the downward tariff review, the government said the project loan from China’s Exim Bank was concessional with a low-interest rate and long maturity period.

The US 135.7 million loan is guaranteed by the Kenyan government, meaning if the project defaults on repayment, the burden is transferred to taxpayers. Read more

The final tariff agreed by the two parties has not been announced.

The 50 MW solar farm is the largest solar station in East and Central Africa and is Kenya’s first utility-scale solar project.

Author: Bryan Groenendaal


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