FMO and the Global Climate Partnership Fund (GCPF) are investing USD 10 million each in renewable energy company Starsight Premier Energy Finance (SPEF). The two investments will support commercial and industrial solar projects in East Africa and thus reduce CO2 emissions.
In Kenya, industrial and commercial enterprises pay high grid tariffs ranging from USD 13-20 cents per kilowatt hour of electricity. Thanks to its innovative lease to own model, SPEF offers commercial and industrial clients in East Africa the opportunity to lease a solar photovoltaic system for 12-15 years after which the system is transferred to the client. The monthly lease payment includes the lease amount for the system, maintenance, insurance, and spare parts. This allows the client to generate their own electricity for about USD 6-8 cents per kilowatt hour.
For manufacturers SPEF also offers an Asset Finance structure which allows clients to take advantage of certain investment allowances and further reduce the cost of their own generated power to as low as USD 4 cents per kilowatt hour. Rupesh Hindocha, CEO, SPEF says: "Thanks to our financing models, our customers usually save 35-60% in electricity costs compared to their local electricity provider. We are honoured to have received this investment from GCPF and FMO which will help us scale up our C&I solar PV business across the region. Together we are driving the energy transition in East Africa."
GCPF's investment in SPEF is an important milestone in promoting sustainable energy solutions in East Africa. Peter Page, Investment Officer, responsAbility says: "Supporting solar PV projects for commercial and industrial applications will provide affordable and reliable access to energy for businesses in the region, spur economic development in East Africa and reduce CO2 emissions. GCPF mobilises private capital with public money to invest in renewable energy and energy efficiency measures in emerging markets. The aim is to mitigate climate change.
FMO, via the Building Prospects Fund, is investing USD 10 million in SPEF. FMO manages Building Prospects on behalf of the Dutch government's Ministry of Foreign Affairs, with the aim to strengthen local economies and create jobs in the private sector. Robert Voskuilen, Manager Energy says: "We are proud to partner with SPEF to advance sustainable energy systems in East Africa, as well as social and economic progress."