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Community Engagement in USD 18.6 Million Hydro Dam Project

March 16, 2018 | | Conference

Patrick Kimathi, Co-Founder of Skynotch Energy Africa, is taking advantage of the energy sector policies to harness energy for grid and off-gird projects. Currently, Skynotch Energy Africa has a 7.8 MW small hydro power project in Meru valued at $18.6 million in capital investment.

Skynotch Energy Africa partnered with the community by forming a public company of 1,200 households with the shareholders in a special purpose vehicle. In the partnership, there is shared ownership and management of the hydro power project. The community is empowered to make decisions as the custodians of the resources. Skynotch Energy Africa undertook the regulatory process and acquired investment for the project. The investment in the community’s social equity is converted into money in the form of revenue sharing by selling the excess energy back to the grid through the feed-in-tariff program.

Mr. Kimathi is confident that such a project investment in energy is not restricted to persons of high net worth. Energy projects by Skynotch Energy Africa that can be replicated at the county level by women and community groups. Over time, these projects will have shorter turnaround times to generate revenue.

Partnering with Community Based Organizations to Fund Energy Projects

Public funding is directed into community development and private sector projects. Community development funds are geared to supporting the marginalized of society. Policy makers and for-profit firms can organize communities at the county level to create enterprise development and secure funding for viable business opportunities.

Skynotch Energy Africa on its own could not raise the funds to develop an energy project. Donor funds are phasing out grants in favour of output based funding, where funding is provided only after attaining agreed upon milestones. However, understanding there are donors who will fund renewable energy projects that benefit the community. On this knowledge, Skynotch Energy Africa built rapport with a community based organization CBO representing 1,200 households. Together they built capacity and set up an energy project. The CBO received the initial funding, which under the guidance of Skynotch Energy Africa, was able to complete a feasibility study to prove the viability of a small hydro power project. The feasibility study showed social impact investors that the project was worthwhile. They injected $18.6 million into the project because it made direct impact to the CBO households with revenue sharing.

 

 

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