Kenya start-ups cut Sh29bn deals with US investors

Kenya’s President William Ruto looks on during a meeting with US Secretary of State Antony Blinken during the US-Africa Leaders Summit in Washington, DC, on December 15, 2022. PHOTO | AFP

Kenya has cut deals of more than Sh29.2 billion at the recently concluded US-Africa Leaders Summit that saw American investors commit to financing African firms to the tune of Sh1.93 trillion.

This continues the warm relations between Nairobi and Washington that the administration of President William Ruto seems to have rekindled.

Major beneficiaries of these deals are start-ups in sectors such as power, healthcare, agriculture, and waste management.

The largest commitment of $97 million (Sh11.95 billion), will see New York-based Symbion Power build and operate 35 megawatts geothermal power plant in the Menengai Volcanic Crater in Great Rift Valley under a 25-year power purchase agreement signed with Kenya Power and a steam supply agreement signed with the Geothermal Development Company.

Kenya-based agribusiness Hello Tractor also partnered with US tractor manufacturer John Deere to scale its pay-as-you-go programme to finance tractors for more than 623,000 smallscale farmers who use the platform on more than 1.7 million acres through a new $5 million (Sh616 million) funding.

Kenya will also be among the five sub-Saharan countries that will benefit from a $40 million equity investment in the private equity Africa Renewable Energy Fund II (AREF II) committed by the US International Development Finance Corporation (DFC). Managed by Berkeley Partners LLP, AREF II is focused on developing, building and operating clean energy assets across the region.

Other countries that will benefit from the fund include Angola, Cameroon, Kenya, Madagascar, and Malawi.

Also read: 63 Kenyan start-ups raise Sh62bn in 2022

“The fund will dedicate capital to mid-sized renewable energy projects across sub-Saharan Africa, increasing access to clean electricity. The fund will invest in projects at both the development and construction stages, with a geographic focus on Angola, Cameroon, Kenya, Madagascar, and Malawi,” reads part of the Commitments Book which features a selection of new partnerships and deals announced during the US-Africa Business Forum.

The forum, which showcased investments and partnerships valued at $15.7 billion (Sh1.93 trillion), was held on the second day of the Summit that ran from December 13 to 15 in Washington DC. This investment advances several DFC priorities, including increasing access to reliable and clean energy and creating jobs in low- and lower-middle-income countries.

Kenya has also been included in another $80 million (Sh9.86 billion) kitty by Standard Bank and GE Healthcare that is aimed at helping the customers of the South African lender in five countries get financing to purchase medical equipment in the next five years.

Dow, a US material sciences company, also announced scaling its partnership with Kenyan recycling company, Mr Green. This partnership targets diverting 90 kilotons of plastic waste from illegal dumpsites and landfills.

The US committed to invest some $55 billion (Sh6.8 trillion) in the continent in the next three years, with much of the money going to the private sector players.

James Mwangi, the CEO of Equity, told Devex, a social enterprise and media platform, that even if the government is slow to move, the private sector can deliver deals quickly.

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