A consortium of companies that includes tier one manufacturer Canadian Solar has signed a memorandum of understanding with local Kenyan authorities to develop a 50MW PV in western Kenya.
Lakeside Solar, which also includes the Africa Energy Development Corporation and Eaton Cooper Solar, signed the agreement last week with the government of Homa Bay County next to Lake Victoria.
The MoU specified a KES12.6 billion (US$145 million) deal for a 50MW project to be built in the area, which is said to be attractive to foreign investors.
The 50MW project is scheduled for completion by the end of 2014 and will generate 120 million kWh a year to be sold to the Kenya Power Company, at an initial minimum tariff rate of US$0.16 per kWh for ten years.
Lakeside Solar will develop the project and provide engineering, procurement and construction (EPC) services and commission with the Rural Electrification Authority, which was set up as part of Kenya’s Energy Act (2006) to improve access to electricity.
Zohrab Mawani, part of the consortium, and CEO of Caldera Geothermal based in Ontario, said: “Lakeside Solar is ready to work with the county to explore optimal terms and options for financing the construction of the plant to enhance [and] demystify obstacles in the area’s energy sector.”
Mawani also said that a loan for solar development will be paid off in 12 years – the Homa Bay County will then benefit from the solar project for the estimated remaining 13-23 year lifespan of the project.
The plant’s expected gross income is reportedly US$9.6 million a year, and thereafter US$4.8 million a year.
“We have enough land which we are going to provide for construction of this project to enhance the lives of our people,” the governor of Hama Bay, Cyprian Awiti, said.
Homa Bay was reportedly chosen because of a good overseas reputation as an “investor friendly region”.