AFD, KAM provide green energy financing in East Africa
Agence Française de Développement (AFD) in partnership with Kenya Association of Manufacturers (KAM) held a high level workshop on Sustainable Use of Natural Resources and Energy Finance Programme (SUNREF) East Africa to discuss among other things, the opportunities and challenges of SUNREF since its inception in Kenya in 2011.
The SUNREF East Africa programme, hosted by Kenya Association of Manufacturers, promotes the development of a low carbon economy in the region by financing the renewable energy and energy efficiency solutions in the private sector.
Speaking at the event, Central Bank of Kenya Governor, Dr. Patrick Njoroge reiterated the importance of the financial sector in promoting green investments and urged Kenyan banks to play an active part in promoting the development of a green economy. “The ongoing success of AFD’s SUNREF programme should be an eye-opener for Kenyan banks to diversify into green energy financing because of the growth potential in the renewable energy and energy efficiency sectors,” said Dr. Njoroge.
Through the SUNREF programme, AFD works with regional partner banks in identifying green investment opportunities and allocating green loans with favourable conditions for tailor-made debt.
Mr. Bruno Deprince, AFD Regional Director underscored the immense progress made by the SUNREF East Africa programme since its inauguration in 2011 which was key to Kenya’s transition towards a green economy. “Green growth provides the private sector with opportunities in the fields of energy management, sustainable natural resources management and environmental protection. The success so far witnessed with Kenyan projects is an indication that the country is ready for an expanded SUNREF programme for the coming years,” added Mr. Deprince.
KAM Chief Executive, Ms Phyllis Wakiaga, highlighted the importance of improving quality of renewable energy and energy efficiency technology to reduce cost of production and increase competitiveness.
“We have built a project portfolio of over 250 projects in hydro, solar, biogas, biomass and energy efficiency and energy service companies (ESCOS) and financed 16 projects to the tune of USD58 million during the last few years. There are still many opportunities available to improve on the quality of renewable energy and energy efficiency technology which will ultimately reduce the cost of production and increase competitiveness,” said Ms. Wakiaga.
Walter Trenton, Head of European Union Delegation to Kenya underscored the importance of multilateral cooperation in the global fight against climate through renewable energy and energy efficiency like SUNREF.
The concessional loans under this programme are characterized by low interest rates, long tenor, and a long grace period. Cooperative Bank of Kenya, Diamond Trust Bank and Commercial Bank of Africa have enlisted as partner banks to the programme in Kenya, while Diamond Trust Bank (Uganda) and Bank of Africa (Tanzania) are the other partner banks in the region.
The programme has also helped the partner banks build their capacity in green energy and energy efficiency by offering occasional staff training facilitated by the technical assistance team.
SUNREF East Africa benefits from a pool of experts drawn from Kenya Association of Manufacturers and international experts who provide technical assistance to project developers and partner banks in the areas of project origination, project bankability, capacity building and awareness creation. This technical assistance is provided courtesy of the European Union.