The project objective is to bring additional solutions (through technical assistance) to achieve the diversification of energy resources in the East African region and help the region’s transition towards renewable energy solutions that are technically, economically and financially viable. The targeted investments are mainly projects of a maximum amount of EUR 5m in hydroelectricity, biomass, biogas, solar and wind power. Other types of projects eligible to the AFD financing are energy efficiency projects, especially in the Agribusiness sector. These solutions, both energy efficiency (EE) and renewable energy (RE) projects, will also contribute to the improvement of the investors’ sustainability, through a more secure power supply and a lower energy bill.
The Project consists of three successive lines of credit at concessional terms (tenor of over 10 years, below market interest rate) to the local banks who in turn will lend at soft conditions to local investors. To be eligible to the credit line, these investors, mainly medium scale enterprises, will have to sponsor renewable energy (RE) projects – for the main part - or energy efficiency (EE) projects. As at June 2014, two credit agreements have been signed between AFD and two banks in Kenya and one with a Tanzanian bank and the negotiation are still ongoing with several Ugandan Banks.End of 2014, additional euros 60 million were approved by AFD for Kenya and in 2015, Chase Bank and Commercial Bank of Africa have joined the project. In 2016, two additional banks in Kenya (DTB and Coop Bank) joined the project, one bank in Uganda (DTB Uganda) in July 2016 and one bank in Tanzania (Bank of Africa Tanzania - BOAT) in November 2016. All banks have made their first disbursements, except BOAT which is expected to disburse for the firt time in September 2017.