Commodities, Emerging Markets, Energy, Frontier Markets, Stocks

China Plans Major Solar Power Plant In Kenya Linked To A $5 Billion Investment Project

China is set to construct a solar power plant in Kenya as part of an ongoing investment plan between the two countries (…) The 50-megawatt plant, which is planned to be built in the city of Garissa, will be financed by the Export-Import Bank of China,” China’s ambassador to Kenya,” Liu Xianfa, said according to International Business Times.

Solar Panel

The project is reportedly set to be one of Africa’s largest solar power installations, and is part of a $5 billion investment project announced by China in Kenya,” the news agency reports. The whole project aims locally to:

  • support energy distribution
  • bring prosperity
  • help to tackle radicalization.

The Export-Import Bank will provide a concessional loan to Kenya in order to complete the renewable energy project (…)  The project is still under plan and I expect that there will be a launching ceremony on site very soon,” Liu said.

Bilateral trade between China and Kenya was worth over $5 billion in 2014, an increase of over 50 percent on the previous year.

We hope that when the entire project is completed by 2016, more than 50 percent of Kenya’s energy production will consist of solar. Already we are witnessing solar investments in Kenya such as a factory that was opened here in 2011 that manufactures solar energy panels,” Cliff Owiti, a senior administrator at the Kenya Renewable Energy Association, told the Guardian.

Last February World Bank reported the following:

Sub-Saharan Africa is rich in energy resources but its potential remains mostly untapped. Despite the abundance of sunlight, solar projects have been developed slowly and often inefficiently.

Weak competition and high transaction costs are some of the obstacles that hamper the progress of the technology.

In a continent where most people live without electricity, expanding the supply of energy has become an imperative that cannot be delayed. To meet projected demand, Africa needs to increase its power-generation capacity by 7,000 megawatts each year—equivalent to the capacity installed in Ireland, and seven times the current rate. That gap hinders economic growth and deters much-needed foreign investment.

China is constantly looking to secure access to Africa predominantly via lucrative, mega infrastructure projects. At the beginning of this year, The African Union and China agreed to on an ambitious transport infrastructure blueprint, aiming to link the capitals of all 54 states of the African continent via motorways, rail and air links. Promoting the development of a mature system of transport infrastructure in Africa will be extremely beneficial to China, guaranteeing it access to natural resources and markets on the continent.

About ETFalpha

Chief ETF Strategist & Co-Founder at EMerging Equity


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