KENYA – Toyota Kenya has acquired a 35 per cent stake in solar installation company Ofgen for an undisclosed value, deepening the auto firm’s interest in the growing clean energy market and offering an avenue to offset its carbon production.

The Competition Authority of Kenya (CAK) approved the deal that will help the auto firm, now known as CFAO Kenya, to diversify its earnings further.

Toyota Tsusho Group is increasingly investing in green energy, including solar power projects, 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.

Toyota Tsusho stepped up its diversification plan with the purchase of French distribution company CFAO in 2012, giving it access to businesses, ranging from retail to healthcare, across Africa.

These businesses have now been integrated with Toyota Tshusho’s own operations, which were mainly involved with vehicle sales.

CFAO’s automotive business, which includes distribution of Toyota and Mercedes Benz cars in Kenya, used to contribute more than half of revenue while healthcare, including pharmaceutical distribution, makes up a third.

The rest comes from technology and energy, which includes renewable energy generation plants.

The company said earlier it wanted to achieve a balance where all the businesses contribute close to an equal share of revenue, which it would do through increased investments and buyouts.

Ofgen offers 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.

The purchase will open 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.

Toyota targeted Ofgen after it hired the company three years ago to instal 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.

Toyota expanded the engagement with Ofgen, building more solar power systems on the roofs of offices in Uganda, converting approximately one-third of its power use to renewable energy.

The firm then decided to get into the business of solar power engineering, procurement, and construction for commercial and industrial firms through Ofgen.

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 its leading clients include Williamson Tea, Fairmont Hotels, Grain Bulk, Kenya Airways, Serena Hotels, Strathmore University, Kenya Ports Authority, Glaxosmithkline and BAT.

Several companies, universities and factories have turned to solar photovoltaic (PV) grid-tied systems to supply power for internal use to ensure reliable supply and reduced operational costs.

Big power consumers such as Africa Logistics Properties (ALP), Mombasa International Airport, and the International Centre of Insect Physiology and Ecology (Icipe) have recently commissioned solar power units on their properties.

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