Toyota Tsusho Invests in Kenyan Solar Solutions Business OFGEN
Toyota Tsusho is accelerating its mission to promote initiatives towards expanding the use of renewable energy in Africa in order to achieve carbon neutrality. As part of this drive to achieve carbon neutrality, Toyota Tsusho has invested in OFGEN, a solar solutions business centered in Kenya.
OFGEN is a company that engages in solar power engineering, procurement, and construction (EPC), and is also in the power provision business for commercial and industrial businesses. OFGEN was founded in 2014 in Kenya and has since expanded its footprint to Uganda, Rwanda, and South Sudan. In that time, OFGEN has successfully built and financed over 30+ on-grid and off-grid solar plants with 10+ MWp solar capacity and 9.3MWh of battery energy across Kenya, Uganda, Rwanda, and South Sudan markets. Some of these installations include Tesla powerpacks. Its power projects so far are in East Africa, but it is looking to expand its operations to include Southern Africa as well.
The Toyota Tsusho Group is actively taking on infrastructure projects towards expanding the use of renewable energy such as solar, wind, and geothermal power in Africa. The Group has installed roof-mounted solar power systems at offices and facilities in each country it expands to and is promoting the use of renewable energy for in-house power consumption. CFAO Kenya, in cooperation with OFGEN, has installed roof-mounted solar power systems at four offices in Kenya and two offices in Uganda to date, and has converted approximately one-third of its power consumption to renewable energy.
Based on the “With Africa For Africa” philosophy, the Toyota Tsusho Group seeks to grow with the people and communities of Africa, and aims to expand the use of renewable energy in order to deliver a better global environment to the children of the future. With this investment in OFGEN, the Toyota Tsusho Group will further accelerate the Group’s efforts to achieve carbon neutrality and contribute to the transition to a decarbonized society.
The commercial and industrial solar sector has been growing steadily in Kenya since 2014. During the early years, the adoption of solar PV systems by corporates was mostly via outright purchase deals. This slowed down uptake as large systems of several hundred kW were quite pricey. Several development finance institutions (DFIs) then partnered with Kenyan banks to offer solar loans to corporates. The process was rather long and tedious from lead generation right up to financial close. This process could take up to 18 months per project.
Later, several solar development companies started offering corporate PPAs and system lease agreements. Under these facilities, corporates could get grid-tied PV systems for no money down, and pay monthly lease fees for 10 to 20 years, structured in a way that they would offset their day time consumption at rates much cheaper per kWh than the utility tariff. The availability of such financing options has helped drive adoption of these behind the meter PV systems as more corporates move to cut energy costs. The sector has now grown to a cumulative 70 MW approximate total installed capacity. There is still so much room for growth in the sector. According to the Clean Captive Power: Understanding the uptake and growth of commercial and industrial (C&I) solar PV in Kenya report, there are an estimated 3,900 large commercial consumers who would benefit from solar power. Currently less than 500 of these customers have adopted PV systems to complement their energy requirements.
As battery storage costs fall, commercial and industrial battery storage systems as part of large microgrids or standalone systems will also become key parts of the energy mix. OFGEN is one of the key players poised to drive growth in this industry as well.
All images courtesy of OFGEN
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