PHOTON International The Photovoltaic Magazine

The Kenya National Bank has launched a PV loan program after a deal with the World Bank for a similar program was cancelled recently.

	© Solagen Ltd.
Banking on PV: Not only the solar collectors, but also the two 75 W BP Solar modules being installed on a house in the Nakuru district of Kenya are now covered under a new loan program.

Following the collapse of a Global Environment Facility (GEF) solar loan scheme in Kenya September 2000, the bank that was to have administered the plan started its own program in December. The Kenya National Bank (KCB) is offering PV loans of up to 200,000 KES ($2,545 USD) to individuals and up to 600,000 KES ($7,634) to institutions. They come with a 5 percent interest rate, as opposed to the common 8 percent, and must be repaid within 36 months. KCB set up the program as an exclusive deal with BP Solar and its local distributor and installer, Solagen Ltd., which will offer three-year guarantees on the systems, including free service and maintenance.

The loan is based on work Solagen had already done with the Photovoltaic Market Transformation Initiative (PVMTI), a GEF program with $25 million in concessional funds administered by the International Finance Corporation (IFC). But two $1 million loan-and-grant investments in KCB were canceled due to a dispute between KCB and the IFC (see PI 10/2001, p. 12). While the PVMTI funding would have supported installations valued at $5.32 million, the current KCB scheme will be smaller in scope. According to a Dec. 14 article in a Nairobi newspaper, KCB has set aside 200 million KES ($2.5 million) for the program, with half of that available to individual borrowers. But Eric Muhanji, Solagen’s managing director, thinks the amount will be higher. He says KCB has put up $2 million for a 50 percent collateral, leaving an equal amount to be used for loans. And, he adds, if defaults are low, the program should be self-generating, with paid-back loans replenishing the pot. »We have always said that this [solar loan scheme] was the missing link to a boom in the market,« he says. The day after the scheme was announced in the newspapers, Solagen’s five shops had already received about 50 inquiries. wph