U.S.-based solar developer, Renewvia Energy, is bringing electricity to rural communities in Kenya and other developing countries through pay-as-go solar micro-grids. Most of these communities will be experiencing use of electricity for the first-time. The microgrids are servicing people and small business in remote areas that are otherwise ineligible to receive an affordable and reliable source of conventional utility power. Renewvia has installed microgrids in rural communities on multiple continents, including South America, Asia, and most recently Sub-Saharan Africa. Nearly one in five (17%) people around the globe live without access to electricity, often as a result of living in a geography beyond the reach of a centralized grid system. Ninety-five percent of these 1.2 billion people are in Sub-Saharan Africa and developing countries in Asia, according to the International Energy Agency.
The rural electrification market potential for Kenya and Sub-Saharan Africa in particular is especially immense and exciting at every level. Renewvia is leveraging its success of developing solar and microgrid projects on four continents to secure implementation financing for the development of up to 50 megawatts (MW) of solar microgrids in Kenya over the next five years. These microgrids will help the Kenyan government reach its goal of 100% electrification for the population by 2030. The decentralized solar microgrids have conventional distribution from power plant to individual domiciles, allowing subscribers to prepay for power based on their needs. The solar microgrids are comprised of a conventional solar array, batteries, diesel generator (if needed for emergency) and wind, if applicable. Kenyan citizens are now receiving distributed power for the first time at a rate that is commensurate with off-grid power generation as opposed to rates offered by “no other option” companies, all without individuals being responsible for maintaining power equipment.
Rural electrification development requires extensive experience collaborating with local governments and utility organizations, as well as an in-depth understanding of how to work within the legal framework of each country. In other Sub-Saharan countries Renewvia is negotiating with the power distributors over particular service areas and negotiating pre-determined valuations for disposition if and when the distribution company or distribution utility decide the market is viable for expansion.
Renewvia is leveraging its balance sheet to seed the rural electrification development projects in parallel to working with conventional capital providers in an effort to achieve underwriting standards for the pay-as-you go individual subscriber unsecured market, which follows the utility market pre-pay model common in the United States. Renewvia understands the need to continue taking balance sheet risk to seed and unlock conventional and scalable financeable structures for rural electrification solar development. Renewvia is in discussions with institutional capital sources to explore conventional financing structures for this new unsecured prepaid individual subscriber model. Renewvia is actively collaborating with respective communities and key stakeholders to understand the individual and commercial needs prior to recruiting subscribers.
In addition, Renewvia’s work in Kenya also includes conducting a feasibility study for the development of solar microgrids in key geographies in Kenya funded by a grant from the U.S. Trade and Development Agency (USTDA) as part of the Power Africa initiative. Renewvia will develop microgrid solar and battery storage systems at eight locations across Kenya with a combined 1.5 MW of new power generation capacity. Successful implementation of the project would help to electrify an estimated 15,000 – 18,000 households and businesses in addition to identifying hundreds more trading center in need of power under the same terms.
As a result of the work Renewvia is doing, many rural Kenyan citizens are receiving power for the first time. Solar microgrids are making the dream of rural electrification a reality in Kenya and beyond.