The funding will primarily be used for small-scale renewable energy projects.
Chase Bank is a leading bank servicing small and medium-sized enterprises in Kenya with over $1.5bn in assets and impressive growth rate year on year. To sustain its growth, the bank has identified green energy lending as a key business development goal. To this end, Chase Bank has entered a partnership with the Global Climate Partnership Fund (GCPF).
Under the agreement, GCPF provides Chase Bank with a $30mn green financing facility which the bank will mainly use to finance small scale renewable energy projects such as captive solar power plants and hydro power plants. Moreover, the bank will receive technical support in identifying green lending opportunities both within their existing client portfolio and in the broader Kenyan energy market with a possible further geographical expansion.
The bank’s green finance team, has already identified several potential projects and will start to disburse financing before the end of the month. This is the first GCPF transaction in Kenya. The country has one of the most developed renewable energy policy frameworks in the region, and the government mandates energy audits for all commercial enterprises using more than 15’000 kWh/month. Moreover, Kenya’s economy is booming: in 2014, GDF growth was 5.3pc. This growth is driving a strong increase in energy demand.
However, there is still much ageing energy infrastructure, and thermal power accounts for over a third of electricity generation. GCPF funding is contributing to further increase the use of clean energy generation in this promising growth market.
Paul Njaga, CEO of Chase Bank, commented on the agreement, “Access to energy is a basic prerequisite for the development of any economy. In order for this to be achieved sustainably, energy must be derived from renewable sources and be used efficiently. Green energy lending therefore is a key strategic focus for Chase Bank. Partnering with GCPF will help drive the growth of our green energy lending portfolio to reach significantly more customers.’
Claudia Arce, chairperson of the GCPF Board, stated “Through working with leading financial institutions in emerging and developing markets such as Chase Bank, GCPF funding is able to reach many small-scale renewable energy and energy efficiency projects. We are glad to have found a committed and strong partner who shares our vision and will be instrumental in driving green energy production in Kenya.”