The deal follows an approval by the Competition Authority of Kenya (CAK) on Tuesday even as Toyota seeks to diversify its earnings further.
“The Competition Authority of Kenya has approved the acquisition of a 35 percent equity stake in OFGEN Limited by CFAO Kenya Limited unconditionally, thereby enhancing investments in renewable energy in the country,” said CAK.
Toyota acquired OFGEN after it hired the company three years ago to installed a 490- panel roof-top solar plant at its headquarters on Mombasa Road in Nairobi with a power capacity of 180kW and an annual energy production of 230,000 kWh.
Currently ,OFGEN has installed over 30 power plants for firms like Serena Hotels, Strathmore University and BAT in the companies’ efforts with a bid to reduce reliance on electricity from Kenya Power.
The purchase opens a new revenue source for the company targeting the country’s estimated solar potential of approximately 15,000 megawatts (MW).
At the moment, the installed capacity is over 100MW led by the rural electrification programme’s off-grid power stations, Malindi Solar Group and Garissa Solar.
The deal will offer Toyota a chance to cash in on the millions of solar kits being mounted on the roofs of homes and business premises around the country.
Households and heavy-consuming industrialists in Kenya are increasingly adopting to solar energy, seeking reliable and cheaper supply alternatives to Kenya Power, which has also expressed interest in venturing into solar installation.
The plant could save Toyota nearly Sh17 million in electricity bills over a period of 20 years and reduce their carbon footprint by 45 metric tonnes per year.
Founded in 2014, OFGEN has built and financed over 30 on-grid and off-grid solar plants across Kenya, Uganda, Rwanda, and South Sudan markets.
Besides Toyota, some of OFGEN clients include Williamson Tea, Fairmont Hotels, Grain Bulk, Kenya Airways, Serena, Strathmore, Kenya Ports Authority, Glaxosmithkline and BAT.
The company said, some of its industrial customers who account for more than half of its sales revenues are gradually shifting to own-generated solar power, dealing a further blow to its already dwindling finances.
Toyota is increasingly investing in green energy, including solar power projects, with a bid to earn carbon credits. The Japanese multinational will use the credits to cut its carbon production from ventures like car manufacturing and boost the firm’s environment-friendly credentials.