Kenya’s Energy Ministry and SkyPower Global Ltd. plan to sign an agreement Sunday that paves the way for the Toronto-based company to develop 1-gigawatt of solar power in East Africa’s biggest economy.
The developments will take place over five years in a deal that SkyPower values at $2.2 billion, the company said Friday in a statement.
Kenya currently gets about two-thirds of its electricity from renewable sources, chiefly hydropower and geothermal wells that account for 38 percent and 25 percent of supplies respectively, according to Bloomberg New Energy Finance data. It has no solar developments of that scale to date.
While the outlines of the agreement aren’t set, “We have an overwhelming interest from our investor base as well as from numerous banks, NGOs and development banks,” SkyPower Chief Executive Officer Kerry Adler said by phone Friday. “In this particular case, there are many avenues for financing these projects that are being reviewed by our finance team.”
Analysts at BNEF were cautious about the lack of details.
“There doesn’t seem to be much substance behind the headlines,” Nico Tyabji, an associate at BNEF, said by e-mail. “The developers still need to find project sites, and others have struggled with land rights and grid capacity for much smaller solar projects in Kenya for years.”
According to SkyPower’s website, the company has a pipeline of more than 25 gigawatts worldwide. Adler said that 300 megawatts of this are operational.
Founded in 2003, the company is majority-owned by CIM Group, a Los Angeles-based real estate and infrastructure investment business. CIM purchased the group as one of the branches of the company sold off a year after Lehman Brothers Inc., a former major shareholder, collapsed, Adler said.